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The world's wealthy movers and shakers have gathered in the ski-resort of Davos, as plunging oil prices and turbulent markets, fuel fears of...

[youtube https://www.youtube.com/watch?v=GXRmrGTEn8g&w=580&h=385]
With no recovery in the Eurozone and the whole of Eastern Europe in trouble, greater turmoil in Asian economies could bring the world...

The global derivatives bubble is now 20 percent bigger than it was just before the last great financial crisis struck in 2008. It is a financial bubble far larger than anything the world has ever seen, and when it finally bursts it is going to be a complete and utter nightmare for the financial system [...]

Economists and Analysts Warn of Wider War
RINF Alternative News
Reprinted with permission from Washington's Blog
Well-known economist Nouriel Roubini tweeted from the gathering of the rich and powerful at...

What happens to the US economy when the Federal Reserve stops printing money to buy mortgage based securities, treasury notes, and other bonds? What happens when that body stops injecting 85 billion dollars into the US economy every month?

These questions torture the economic pundits in the mainstream press.

Contrary to what most believe there has been no recovery. The reports from the other principal global economies have been dismal, recording stagnation or anemic growth. In the mean time, the US economy has been sustained by forced feeding. The Federal Reserve quietly prints notes and takes around 85 billion dollars worth of various securities off the market and parks them on the Fed's balance sheets. The announced reasons for this action are to keep interest rates low, attracting borrowers, and to thus stimulate business growth and job creation. An unannounced consequence of the 85 billion dollar injection has been a surge in equity markets and housing prices. Since both stock portfolios and home values are the principal components in the psychological “wealth effect” -- the subjective, personal sense of financial well-being -- they have spurred the impression of recovery and consumer confidence. Behind this conjured image of recovery, the US economy continues to stagnate and erode.

Whenever the Federal Reserve has suggested that it might slow or end this life-support, markets have dropped precipitously.

Obviously, the Federal Reserve program, dubbed “quantitative easing,” is a back-door stimulus program. Not a stimulus program of the New Deal type, not public works and public jobs, but more a reclamation of the garbage piled up after the massive, destructive party thrown by the financial sector and a rekindling of the pre-crisis euphoria. No one in the political establishment, neither Republican nor Democrat, had the stomach for a full-blown New Deal program, nor did they have any desire to pass even a little of the cost of a fix-up on to their corporate masters.

So the task of recovery fell in the lap of the Federal Reserve, an ostensibly independent non-political body. The Federal Reserve is not political, except when it is. While it can't be dictated to by the branches of government, its make-up of ivy league professors and financial industry veterans guarantees loyalty to corporate moguls. It also keeps an ear open to the powerful as well as the rich. On occasion the Fed even hears the voices from the barricades, but only when they are at the barricades!

It shares that “independence “ with the Supreme Court. Like the Supreme Court, the Fed gets occasionally chastised when it either missed or failed to get the message of a ruling class change in policy.

All central banks boast of their independence, but all listen closely for a shift in political favor. The Central Bank of Japan recently demonstrated its fealty to political change. With the election of Shinzo Abe as Prime Minister, the Bank relented to his pressure and began a policy of quantitative easing with the goal of doubling Japan's money supply in two years. Abe, a right-wing nationalist, advocates purchasing securities and bonds through a speed-up of the Bank's printing presses, but makes no effort to conceal his real goal: radically reducing the exchange rate of the national currency, the Yen.

Like his foreign policy initiatives, Abe's currency policy is a bold act of aggression, in this case, economic aggression. A weak yen makes Japanese manufacturing products cheaper in global markets, giving Japan a competitive edge against other global manufacturers. The rise of Japanese nationalism has not gone unnoticed by other Asian powers. Chinese demonstrators have trashed Japanese cars in a way reminiscent of similar spectacles in the US decades ago. Japanese automobile sales have dropped sharply in the PRC.

While retaliation may well be on the horizon, the Abe policies have brought a sharp drop in the Yen's value, but also great volatility in Asian equity markets.

Similarly, for all the US Federal Reserve's aggressiveness in printing money, the stock market's surge and the recovery of housing prices have masked serious issues plaguing the real US economy.

[June 2: “Investors have ignored poor economic news as stocks have risen... The Basil, Switzerland based Bank of International Settlements said... that central banks' policies of record low interest rates and monetary stimulus had helped investors “tune out” bad news-- every time an economic indicator disappointed, traders simply took that as confirmation that central banks would continue to provide stimulus.” as reported by Fox News.]

Disposable personal income growth is collapsing, for example. Excepting the 2008-2009 collapse, disposable personal income growth was lower in 2012 than any time since 1959 and is trending even lower in 2013. Not surprisingly, the personal savings rate-- a rate that grew dramatically after the frivolity leading to the 2008-2009 collapse-- has now dropped sharply. Clearly, workers are taking home less while reducing their savings to pay the bills. While unsustainable, this tact has buoyed consumer spending.

[May 31: The Commerce Department reported a .2% pull back in consumer spending for April, 2013.]

Manufacturing production in the US has declined for three of the last four months.Caterpillar Inc., a bell weather of the basic manufacturing sector, has witnessed factory orders of machines, calculated on a rolling three-month average, decline steadily throughout 2012, moving into negative territory at year's end.

Hyper-exploitation in 2009, in the form of unprecedented gains of productivity growth, pulled the US economy from its nadir. But since 2009, productivity gains have slackened with a substantial decline in the last quarter of 2012 and only a very modest recovery in the first quarter of 2013. Consequently, anemic corporate revenue growth is increasingly crimping earnings, once again threatening the rate of profit.

Pressures on profit are demonstrated by the falling yield on junk bonds. The demand for yield-- the never-ending search for a higher rate of profit-- has driven the yield on the riskiest investments lower than at any time in recent memory (a leading high-yield bond index records a return below 5%, the lowest since records began in 1983!). Conversely, treasury bonds, once popular as a safe haven, are now commanding greater and greater yield despite the fact that the Federal Reserve gobbles them up and removes them from bond markets. Obviously, investors do not want safe Treasuries; investors do want risky junk bonds! The gap between Treasury yields and junk bond yields are narrower than any time since 2007. Are we skating on the same thin ice, the same crisis of accumulation?

Accelerating private debt in Asia suggests that much of the capital seeking higher profit growth rates has landed there. But Asia is not the hot bed of growth that it was a few years ago. The mounting private debt in Asian economies supports risky, speculative projects and services like commercial and residential real estate. With international trade tepid, these once export-leading countries are attempting to sustain growth through speculation and the hope of global recovery. The new Chinese leadership seems determined to reduce the role of the state sector, market regulation, and public financing, the very factors that allowed the PRC to painlessly weather the global crisis. They are determined to entrust the fate of the economy to global markets. The simultaneous shrinking of government debt and the explosion of private debt underline this policy shift.

[May 31: The Reserve Bank of India reported the lowest annual GDP growth rate in a decade for the end of the fiscal year, March 31.]

The once robust South American economies are also slowing. Exports to the PRC are declining and exports to the EU are on the skids, retarding growth throughout the region. Stagnant growth presents new challenges to the conservative neo-liberal regimes on the continent as well as the more progressive social democratic governments. Nor do South American economies offer any relief, as they have until recently, to the global economy.

And, of course, Europe is in a depression-- a deep and profound depression. The EU as a unity faces both centrifugal and centripetal forces that challenge any policy resolution. Moreover, the major parties – conservative, liberal, and social democratic-- have exhausted their policy toolboxes. Until a new road is chosen, the European Union will only drag the world economy towards a similar fate.

[May 31: Eurostat reports the EU unemployment rate reached a new high-- 12.2% in April-- the highest level ever recorded since euro-wide tracking began in 1995.]

The global economy faces two stubborn challenges: first, a crisis of accumulation and second, an insufficiency of global demand. They are, of course, inter-related, continuation of the 2008-2009 collapse, and immune to conventional treatment. The vast inequalities of wealth and the resultant massive accumulation of capital hungering for investment opportunities (driven by Marx's tendency for the rate of profit to fall) stand at the center of the lingering crisis. Capital continues to seek increasingly risky and unproductive profit schemes, schemes that strangle productive, socially useful (but unprofitable!) activities. At the same time, the crisis has immiserated millions and idled a vast mass of human capital. Left with limited resources and limitless insecurities, these casualties of the crisis have necessarily reduced their patterns of consumption. A shrinkage in global demand followed.

Some still harbor illusions of taming capitalism and slaking its thirst for profit. As the years of crisis continue, it looks more and more like the beast must be slaughtered.

Don’t look now, but conditions are deteriorating in the western Pacific. Things are turning ugly, with consequences that could prove deadly and spell catastrophe for the global economy.

In Washington, it is widely assumed that a showdown with Iran over its nuclear ambitions will be the first major crisis to engulf the next secretary of defense — whether it be former Senator Chuck Hagel, as President Obama desires, or someone else if he fails to win Senate confirmation. With few signs of an imminent breakthrough in talks aimed at peacefully resolving the Iranian nuclear issue, many analysts believe that military action — if not by Israel, then by the United States — could be on this year’s agenda.

Lurking just behind the Iranian imbroglio, however, is a potential crisis of far greater magnitude, and potentially far more imminent than most of us imagine. China’s determination to assert control over disputed islands in the potentially energy-rich waters of the East and South China Seas, in the face of stiffening resistance from Japan and the Philippines along with greater regional assertiveness by the United States, spells trouble not just regionally, but potentially globally.

Islands, Islands, Everywhere

The possibility of an Iranian crisis remains in the spotlight because of the obvious risk of disorder in the Greater Middle East and its threat to global oil production and shipping. A crisis in the East or South China Seas (essentially, western extensions of the Pacific Ocean) would, however, pose a greater peril because of the possibility of a U.S.-China military confrontation and the threat to Asian economic stability.

The United States is bound by treaty to come to the assistance of Japan or the Philippines if either country is attacked by a third party, so any armed clash between Chinese and Japanese or Filipino forces could trigger American military intervention. With so much of the world’s trade focused on Asia, and the American, Chinese, and Japanese economies tied so closely together in ways too essential to ignore, a clash of almost any sort in these vital waterways might paralyze international commerce and trigger a global recession (or worse).

All of this should be painfully obvious and so rule out such a possibility — and yet the likelihood of such a clash occurring has been on the rise in recent months, as China and its neighbors continue to ratchet up the bellicosity of their statements and bolster their military forces in the contested areas. Washington’s continuing statements about its ongoing plans for a “pivot” to, or “rebalancing” of, its forces in the Pacific have only fueled Chinese intransigence and intensified a rising sense of crisis in the region. Leaders on all sides continue to affirm their country’s inviolable rights to the contested islands and vow to use any means necessary to resist encroachment by rival claimants. In the meantime, China has increased the frequency and scale of its naval maneuvers in waters claimed by Japan, Vietnam, and the Philippines, further enflaming tensions in the region.

Ostensibly, these disputes revolve around the question of who owns a constellation of largely uninhabited atolls and islets claimed by a variety of nations. In the East China Sea, the islands in contention are called the Diaoyus by China and the Senkakus by Japan. At present, they are administered by Japan, but both countries claim sovereignty over them. In the South China Sea, several island groups are in contention, including the Spratly chain and the Paracel Islands (known in China as the Nansha and Xisha Islands, respectively). China claims allof these islets, while Vietnam claims some of the Spratlys and Paracels. Brunei, Malaysia, and the Philippines also claim some of the Spratlys.

Far more is, of course, at stake than just the ownership of a few uninhabited islets. The seabeds surrounding them are believed to sit atop vast reserves of oil and natural gas. Ownership of the islands would naturally confer ownership of the reserves — something all of these countries desperately desire. Powerful forces of nationalism are also at work: with rising popular fervor, the Chinese believe that the islands are part of their national territory and any other claims represent a direct assault on China’s sovereign rights; the fact that Japan — China’s brutal invader and occupier during World War II — is a rival claimant to some of them only adds a powerful tinge of victimhood to Chinese nationalism and intransigence on the issue. By the same token, the Japanese, Vietnamese, and Filipinos, already feeling threatened by China’s growing wealth and power, believe no less firmly that not bending on the island disputes is an essential expression of their nationhood.

Long ongoing, these disputes have escalated recently. In May 2011, for instance, the Vietnamese reported that Chinese warships were harassing oil-exploration vessels operated by the state-owned energy company PetroVietnam in the South China Sea. In two instances, Vietnamese authorities claimed, cables attached to underwater survey equipment were purposely slashed. In April 2012, armed Chinese marine surveillance ships blocked efforts by Filipino vessels to inspect Chinese boats suspected of illegally fishing off Scarborough Shoal, an islet in the South China Sea claimed by both countries.

The East China Sea has similarly witnessed tense encounters of late. Last September, for example, Japanese authorities arrested 14 Chinese citizens who had attempted to land on one of the Diaoyu/Senkaku Islands to press their country’s claims, provoking widespread anti-Japanese protests across China and a series of naval show-of-force operations by both sides in the disputed waters.

Regional diplomacy, that classic way of settling disputes in a peaceful manner, has been under growing strain recently thanks to these maritime disputes and the accompanying military encounters. In July 2012, at the annual meeting of the Association of Southeast Asian Nations (ASEAN), Asian leaders were unable to agree on a final communiqué, no matter how anodyne — the first time that had happened in the organization’s 46-year history. Reportedly, consensus on a final document was thwarted when Cambodia, a close ally of China’s, refused to endorse compromise language on a proposed “code of conduct” for resolving disputes in the South China Sea. Two months later, when Secretary of State Hillary Rodham Clinton visited Beijing in an attempt to promote negotiations on the disputes, she was reviled in the Chinese press, while officials there refused to cede any ground at all.

As 2012 ended and the New Year began, the situation only deteriorated. On December 1st, officials in Hainan Province, which administers the Chinese-claimed islands in the South China Sea,announced a new policy for 2013: Chinese warships would now be empowered to stop, search, or simply repel foreign ships that entered the claimed waters and were suspected of conducting illegal activities ranging, assumedly, from fishing to oil drilling. This move coincided with an increase in the size and frequency of Chinese naval deployments in the disputed areas.

On December 13th, the Japanese militaryscrambled F-15 fighter jets when a Chinese marine surveillance plane flew into airspace near the Diaoyu/Senkaku Islands. Another worrisome incident occurred on January 8th, when four Chinese surveillance ships entered Japanese-controlled waters around those islands for 13 hours. Two days later, Japanese fighter jets were again scrambled when a Chinese surveillance plane returned to the islands. Chinese fighters then came in pursuit, the first time supersonic jets from both sides flew over the disputed area. The Chinese clearly have little intention of backing down, having indicated that they will increase their air and naval deployments in the area, just as the Japanese are doing.

Powder Keg in the Pacific

While war clouds gather in the Pacific sky, the question remains: Why, pray tell, is this happening now?

Several factors seem to be conspiring to heighten the risk of confrontation, including leadership changes in China and Japan, and a geopolitical reassessment by the United States.

* In China, a new leadership team is placing renewed emphasis on military strength and on what might be called national assertiveness. At the 18th Party Congress of the Chinese Communist Party, held last November in Beijing, Xi Jinping was named both party head and chairman of the Central Military Commission, making him, in effect, the nation’s foremost civilian and military official. Since then, Xi has made several heavily publicized visits to assorted Chinese military units, all clearly intended to demonstrate the Communist Party’s determination, under his leadership, to boost the capabilities and prestige of the country’s army, navy, and air force. He has already linked this drive to his belief that his country should play a more vigorous and assertive role in the region and the world.

In a speech to soldiers in the city of Huizhou, for example, Xi spoke of his “dream” of national rejuvenation: “This dream can be said to be a dream of a strong nation; and for the military, it is the dream of a strong military.” Significantly, he used the trip to visit the Haikou, a destroyer assigned to the fleet responsible for patrolling the disputed waters of the South China Sea. As he spoke, a Chinese surveillance plane entered disputed air space over the Diaoyu/Senkaku islands in the East China Sea, prompting Japan to scramble those F-15 fighter jets.

* In Japan, too, a new leadership team is placing renewed emphasis on military strength and national assertiveness. On December 16th, arch-nationalist Shinzo Abe returned to power as the nation’s prime minister. Although he campaignedlargely on economic issues, promising to revive the country’s lagging economy, Abe has made no secret of his intent to bolster the Japanese military and assume a tougher stance on the East China Sea dispute.

In his first few weeks in office, Abe has already announced plans to increase military spending and review an official apology made by a former government official to women forced into sexual slavery by the Japanese military during World War II. These steps are sure to please Japan’s rightists, but certain to inflame anti-Japanese sentiment in China, Korea, and other countries it once occupied.

Equally worrisome, Abe promptly negotiated an agreement with the Philippines for greater cooperation on enhanced “maritime security” in the western Pacific, a move intended to counter growing Chinese assertiveness in the region. Inevitably, this will spark a harsh Chinese response — and because the United States has mutual defense treaties with both countries, it will also increase the risk of U.S. involvement in future engagements at sea.

* In the United States, senior officials are debating implementation of the “Pacific pivot” announced by President Obama in a speech before the Australian Parliament a little over a year ago. In it, he promised that additional U.S. forces would be deployed in the region, even if that meant cutbacks elsewhere. “My guidance is clear,” he declared. “As we plan and budget for the future, we will allocate the resources necessary to maintain our strong military presence in this region.” While Obama never quite said that his approach was intended to constrain the rise of China, few observers doubt that a policy of “containment” has returned to the Pacific.

Indeed, the U.S. military has taken the first steps in this direction, announcing, for example, that by 2017 all three U.S. stealth planes, the F-22, F-35, and B-2, would be deployed to bases relatively near China and that by 2020 60% of U.S. naval forces will be stationed in the Pacific (compared to 50% today). However, the nation’s budget woes have led many analysts to question whether the Pentagon is actually capable of fully implementing the military part of any Asian pivot strategy in a meaningful way. A study conducted by the Center for Strategic and International Studies (CSIS) at the behest of Congress, released last summer,concluded that the Department of Defense “has not adequately articulated the strategy behind its force posture planning [in the Asia-Pacific] nor aligned the strategy with resources in a way that reflects current budget realities.”

This, in turn, has fueled a drive by military hawks to press the administration to spend more on Pacific-oriented forces and to play a more vigorous role in countering China’s “bullying” behavior in the East and South China Seas. “[America’s Asian allies] are waiting to see whether America will live up to its uncomfortable but necessary role as the true guarantor of stability in East Asia, or whether the region will again be dominated by belligerence and intimidation,” former Secretary of the Navy and former Senator James Webb wrote in the Wall Street Journal. Although the administration has responded to such taunts by reaffirming its pledge to bolster its forces in the Pacific, this has failed to halt the calls for an even tougher posture by Washington. Obama has already been chided for failing to provide sufficient backing to Israel in its struggle with Iran over nuclear weapons, and it is safe to assume that he will face even greater pressure to assist America’s allies in Asia were they to be threatened by Chinese forces.

Add these three developments together, and you have the makings of a powder keg — potentially at least as explosive and dangerous to the global economy as any confrontation with Iran. Right now, given the rising tensions, the first close encounter of the worst kind, in which, say, shots were unexpectedly fired and lives lost, or a ship or plane went down, might be the equivalent of lighting a fuse in a crowded, over-armed room. Such an incident could occur almost any time. The Japanese press has reported that government officials there are ready to authorize fighter pilots to fire warning shots if Chinese aircraft penetrate the airspace over the Diaoyu/Senkaku islands. A Chinese general has said that such an act would count as the start of “actual combat.” That the irrationality of such an event will be apparent to anyone who considers the deeply tangled economic relations among all these powers may prove no impediment to the situation — as at the beginning of World War I — simply spinning out of everyone’s control.

Can such a crisis be averted? Yes, if the leaders of China, Japan, and the United States, the key countries involved, take steps to defuse the belligerent and ultra-nationalistic pronouncements now holding sway and begin talking with one another about practical steps to resolve the disputes. Similarly, an emotional and unexpected gesture — Prime Minister Abe, for instance, pulling a Nixon and paying a surprise goodwill visit to China — might carry the day and change the atmosphere. Should these minor disputes in the Pacific get out of hand, however, not just those directly involved but the whole planet will look with sadness and horror on the failure of everyone involved.

Michael Klare is a professor of peace and world security studies at Hampshire College, a TomDispatch regular, and the author, most recently, ofThe Race for What’s Left, just published in paperback. A documentary movie based on his book Blood and Oil can be previewed and ordered at www.bloodandoilmovie.com. You can follow Klare on Facebook by clickinghere.

This recent release of the manufacturing and industrial production data added further support to our previous commentary regarding the search for the much touted economic recovery. Unfortunately, it has yet to manifest itself. The latest data showed that manufacturing in January fell back but after strong gains in December and November. However, it is important to remember that the gains at the end of 2012 were driven by the effects of Hurricane Sandy and the "Fiscal Cliff." That ramp up in November and December is likely to leave a void in demand in the coming months - so January's weakness is likely a return to a more normalized trend. Also, most of the production gains in the previous two months came from motor vehicles as replacements were needed post the hurricane flooding. For the month of January industrial production decreased 3.2% after a gain of 2.9% in December and rise of 5.9% in November.

Industrial production is one of the four major components of economic strength, or weakness, so the direction and trend of the industrial production data is key to our macroeconomic and investment outlook. The chart below shows the annual rate of change in industrial production going back to 1920. For the most part, when the annual rate of change in industrial production has been below zero - the economy has been in a recession. Currently, the annual rate of change is 2.1%, which is down sharply from the 7.5% rate of change seen at the peak of the economic growth cycle in 2010, clearly shows an economy that is not currently in recession. However, that could be just a function of time given the fairly steep decline that is currently in progress.

The concerns over economic growth are important, both domestically and internationally, as it directly affects corporate profit margins and valuations. The belief, currently, is that the economy in the U.S. can decouple from the rest of the globe and act as an island of economic prosperity. With 40% of corporate profits tied to international exposure it is unlikely that the U.S. can remain decoupled from the rest of the global community for long.

The chart below shows U.S. industrial production as compared to the Eurozone. It is clear that the drag from the Eurozone is weighing on domestic output.

Dwaine Van Vurren from RecessionAlert.com picked up on this fact in his recent article:

"With the disappointing initial GDP releases for Q42012 from Europe out, the 'world' as defined by 41 OECD countries across the globe, has plunged into recession. We define 'recession' through two alternative definitions for our comparison, either the presence of a single negative quarter-on-quarter growth or the more traditional two consecutive negative quarterly growths. Whichever way you look at it, the number of countries in expansion plunged dramatically between 3Q2013 and 4Q2012 as shown below:

It is clear the U.S is faring far better than most, but one has to question how long she can remain above water with the drag of her economic peers weighing upon her economy. "

There are three important points to be made here:

1) The economic data that is used by the NBER in determining economic recessions is subject to heavy backward revisions. This is why the NBER never announces a recession in advance of its occurrence. Due to the massive amounts of artificial intervention currently in the system - it is highly likely that the majority of models will fail to predict the onset of the next recession.

2) The drag on the Eurozone recession will continue to impede economic growth in the U.S., and;

3) The current reads on economic data as stated above, have been skewed due to the influences of the "fiscal cliff", Hurricane Sandy and an exceptionally warm winter. It is likely that the reversion to more normalized data trends in months ahead will show a more marked pullback in the domestic economic growth story.

What is clear, however, is that the economic data is not markedly improving. While monthly data points will remain volatile it is the trend of the data that is most telling about macroeconomic future. Currently, that outlook remains one of a "struggle through" environment at best.

While hardly saying something that we have not mentioned at least once in the past four years, Jeremy Grantham's latest letter is worthy read if for no other reason because it is encouraging to see that despite the relentless creep of Bernanke's madenning central planning regime, the smartest people in the room still haven't lost sight of the big picture.

Key highlights:

all global assets are once again becoming overpriced. This reminds me of the idea sometimes attributed to Einstein that a workable definition of madness is constantly repeating the same actions but expecting a different outcome!

...

it was extraordinarily unlikely that the extremely diversified U.S. housing market would shoot up like it did and, frankly, even more remarkable that Bernanke and his timid or incompetent advisors could miss it. This is a doubly amazing miss because his and Greenspan’s policy caused this bubble in the first place!) In comparison, his willingness to target an unrealistic 3% level for GDP growth is statistically a microscopic error, a picayune mistake. Unfortunately, though, in the hands of probably the most influential man in the global economic world, it is an extremely dangerous one.

...

I like the analogy of the Fed beating a donkey (the 1% growing economy) for not being a horse (his 3% growing economy). I assume he keeps beating it until it either turns into a horse or drops dead from too much beating!

...a) if we in the U.S. don’t invest, others will and it will, in the longer run, definitely end badly; b) that even if there is a lower-return world in the future it is still better to own the cheaper assets; and c) it behooves buyers of “cap rate” type assets like real estate to realize that the current low rates are flattered by current Fed policy, which will, like everything else in life, pass away one day, leaving them looking overpriced. It can’t be too soon for me.

And some more:

The Fed’s negative real rates regime, designed to badger us into riskier investments in order to push up equity prices and grab a short-term wealth effect (that must be given back one day when least comfortable and least expected), has gone on for a long and, for me, boring time. This low interest rate period is serving, therefore, as a sneak preview of what a permanently lower rate regime might look like (although any permanently lower rates reflecting lower GDP growth would be by no means as low as these engineered rates that we are currently experiencing). So what are some of these effects? The artificially low T-Bill rates first work their way slowly up the curve. Next, the most obviously competitive type of equities – high yield stocks – begin to be bid up ahead of the rest of the market, as has happened. “I’ve just got to squeeze out some higher rates somewhere, anywhere,” is the pension fund plea. Then, this low rate competition begins to filter into other securities, historically sought after for their higher yields: higher-grade real estate, where the “cap rates” slowly fall; and, unfortunately, also forestry and farmland, mainly of the larger and more standard varieties that appeal to institutions, which show declines in their required yields, i.e., their prices rise. The longer the engineered rates stay below true market rates, the higher asset prices become until, yes, you’ve got it, corporate assets begin to sell way over replacement cost. Then, if the heart of capitalism is still beating at all, a long period of over-investment begins and returns are bid down and everything moves into balance, often helped along if asset prices get too high, as in 2000 and 2007, by a good healthy market crunch. (This strategy will be seen in future years as archetypical of the Greenspan-Bernanke era: badger and bully investors into taking more risk and eventually pushing assets – houses or stocks or both – far over replacement value, followed eventually, at long and hard-to-predict intervals, by exciting crashes. No way to run a ship, but it does produce an environment that contrarians like us, who can take a few licks, can thrive in.)

The normal capitalistic response described above runs smack into the new tendency for corporations to either sit on money or buy stock back (regardless of how expensive it may be!), which works in the opposite direction to create shortages, drive prices up, and, as a by-product, lower job creation and GDP growth. So where does this all come out? You tell me. All that I know is: a) if we in the U.S. don’t invest, others will and it will, in the longer run, definitely end badly; b) that even if there is a lower-return world in the future it is still better to own the cheaper assets; and c) it behooves buyers of “cap rate” type assets like real estate to realize that the current low rates are flattered by current Fed policy, which will, like everything else in life, pass away one day, leaving them looking overpriced. It can’t be too soon for me. In the meantime for us at GMO it means emphasizing care and maintaining a heightened sense of value discipline, not only in stock selection, as the whole world is once again bid up over fair value in a way so typical of the post 1994 era, but also in forestry and farmland. GMO has investments in those areas too and recognizes the need to sidestep overpricing by emphasizing the nooks and crannies. Fortunately there are more nooks and deeper crannies in forests and farmland than there are in almost any other area, certainly including stocks.

This doesn’t really fit in with a quarterly letter emphasizing important good news, but being about the Fed, I have to make an exception. The Fed appears to be still assuming a 3% growth rate for future U.S. GDP. It would be safer and more confidence-inspiring, now that Bernanke appears to take his responsibility for growth seriously, that he at least have a reasonable growth target (preposterous as that notion is to me that the Fed should or even could affect long-term growth simply by messing about with interest rates). The growth in available man-hours has definitely declined by about 1% a year, yet Bernanke’s assumption for our GDP’s normal trend growth appears unchanged at its old 3%. Ergo, he must be assuming an offsetting rise of 1% in productivity. But why? We should treat these assumptions quite seriously for this is famously (for me) and painfully (for all of us) the man who could not see a 3&frac34;-standard-deviation housing market, and indeed protested that all was normal, etc., etc., etc. (Dear handful of niggling readers, this 3&frac34;-standard-deviation event is calculated on the assumption of a normal distribution, as is often done in investing, even though we [especially at GMO] know this is not true but is just a convenient statistical device. In fact, we at GMO know quite a bit more on this topic for we have studied more or less all assets for as long as we can find data and we have found a remarkable total of 330 “bubbles,” 36 of which we call “major, important bubbles,” which we define as 2-standard-deviation events, given the same assumption. Well, a 2-sigma event should occur every 44 years in a normally distributed world and they have occurred every 31 years. This is much closer to random than we had previously thought. Yes, financial asset data is fat-tailed; that is, there are more outlying events than are found in a normally distributed series, but they are not extremely fat-tailed. They show up as 2-sigma events but occur as often as 1.8-sigma events would occur in normal distributions. Extrapolating, we can assume that Bernanke’s 3&frac34;-sigma housing bubble would occur, adjusted for our fat-tailed real-life history, not every 10,000 years, but somewhere more like 1 in 5,000 years! I previously used “a 1-in-1,200-year event” as a casually selected very large number to describe the 2006 housing bubble. But under challenge, these current numbers are more accurate. No, this does not mean we have 10,000 years of data or even 5,000. It is just statistics, full as always of assumptions, which in this case we hope approach rough justice. What it does definitely mean, though, is that it was extraordinarily unlikely that the extremely diversified U.S. housing market would shoot up like it did and, frankly, even more remarkable that Bernanke and his timid or incompetent advisors could miss it. This is a doubly amazing miss because his and Greenspan’s policy caused this bubble in the first place!) In comparison, his willingness to target an unrealistic 3% level for GDP growth is statistically a microscopic error, a picayune mistake. Unfortunately, though, in the hands of probably the most influential man in the global economic world, it is an extremely dangerous one.I like the analogy of the Fed beating a donkey (the 1% growing economy) for not being a horse (his 3% growing economy). I assume he keeps beating it until it either turns into a horse or drops dead from too much beating! Fine-tuning economic growth, an impossible job for the Fed anyway, is hardly likely to get any easier by badly overstating trend-line growth. It seems nearly certain, therefore, that the Fed will keep trying to whack the donkey for far too long. The likely consequences of this policy are, to be frank, over my head, but my colleague Edward Chancellor will address them briefly if I can nag him effectively.

Courtesy of the above Fed policy, all global assets are once again becoming overpriced. This reminds me of the idea sometimes attributed to Einstein that a workable definition of madness is constantly repeating the same actions but expecting a different outcome! But, as always, asset prices are not uniformly overpriced: emerging markets and, we believe, Japan are only moderately overpriced. European stocks are also only a little expensive, but in today’s world are substantially more risky than normal. The great global franchise companies also seem only moderately overpriced. Forestry and farmland, which is not super-prime Midwestern, is also only moderately overpriced but comes with our nook and cranny sticker attached. But much of everything else is once again brutally overpriced. Notably, U.S. stocks (ex “quality”) now sell at a negative seven-year imputed return on our numbers and most global growth stocks are close to zero expected return. As for fixed income – fugetaboutit! Most of it has negative estimated returns on our data, and longer debt, as always, carries that risk that may be slight in any period, but is horrific if it occurs – accelerating inflation.

When one combines the apparent determination and influence of those who do the bullying with the career risk and short-termism of the bullied and the desire of the general public to believe unbelievable good news, these overpricings can go much further and the Fed can win another round or two. That’s the problem. A clue to timing would be when we begin to hear more passionate new era arguments: profit margins will always be higher; growth will snap back to 3% for the developed world; and new ones I can’t think of … maybe “when the discount rate is this low the Dow should sell at, perhaps, 36,000.” In the meantime, prudent managers should be increasingly careful. Same ole, same ole.

[youtube https://www.youtube.com/watch?v=QC2wh7x29Ow&w=580&h=385]
http://democracynow.org - A new report from Oxfam on global inequality finds the world's richest 62 billionaires now own as much wealth as half...

[youtube https://www.youtube.com/watch?v=YvI5CIUY42I&w=580&h=385]
WATCH THE FULL EPISODE HERE: https://www.youtube.com/watch?v=Nt0tH0R30EM Global problems have been accumulating in recent years as the world's ...
Via Youtube

War Threat Rises As Economy Declines Paul Craig Roberts, Keynote Address to the Annual Conference of the Financial West Group, New Orleans, May 7, 2015 The defining events of our time are the collapse of the Soviet Union, 9/11, jobs…

Barack Obama is secretly negotiating a global economic treaty which would destroy thousands of American businesses and millions of good paying American jobs. In other words, it would be the final nail in the coffin for America’s economic infrastructure. Obama knows that if the American people actually knew what was in this treaty that they [...]

According to the World Bank in the nineties, it was expected (and hoped) that some 400 million people in Indian agriculture would be moving out of the sector by 2015. To help them on their way, farming had to be made financially non-viable and policies formulated to facilitate the process.

“India is on fast track to bring agriculture under corporate control... Amending the existing laws on land acquisition, water resources, seed, fertilizer, pesticides and food processing, the government is in overdrive to usher in contract farming and encourage organized retail. This is exactly as per the advice of the World Bank and the International Monetary Fund as well as the international financial institutes.”

He notes that in its 2008 World Development Report, the World Bank wanted India to hasten the process by accelerating land acquisitions and launching a network of training institutes to train younger people in rural areas so as to make them eligible for industrial work. This is now happening, especially the highly contentious push to facilitate private corporations' access to land, which has been sparking mass protests across the country.

Sharma describes how US subsidies and global trade policies work to benefit hugely wealthy agribusiness corporations, while serving to cripple the agricultural sectors of poorer countries. The massive subsidies doled out by the US to its giant agribusiness companies lower global produce prices and buck markets in favour of Washington. The US has also included non-trade barriers (such as various health standards and regulations) to keep agricultural imports out. At the same time, India has opened its markets and support for its own farmers is being cut. Farmers are thus being left to the vagaries of a global market slanted in favour of US interests.

As India's farmers face increasing financial distress and foreign private players try to move in to secure land and the seed, food processing and food retail sectors, what is happening courtesy of compliant politicians is tantamount to cannibalizing the country at the behest of foreign interests.

Western agribusiness has already gained an influential foothold in India and many of the country’s national public bodies. Along with US food processing giants Cargill and Archer Daniels Midland, agribusiness aims to recast the rural economy (and thus Indian society, given that hundreds of millions depend on it for a living) according to its own needs. This would mean eventually moving over 600 million (never mind the previously mentioned figure of 400 million) who depend on agriculture and local food processing activities into urban areas.

Monsanto already dominates the cotton industry in the country and is increasingly shaping agri-policy and the knowledge paradigm by funding agricultural research in public universities and institutes (see here). Moreover, public regulatory bodies are now severely compromised and riddled with conflicts ofinterest where decision-making over GMOs are concerned.

But this is the nature of the 'globalization' agenda: the goal is to ‘capture’ and ‘exploit’ foreign markets and their policy/regulatory bodies. The culture of neoliberalism is exemplified by APCO Worldwide, a major ‘global communications, stakeholder engagement and business strategy’ company that Narendra Modi has been associated with in the past. In APCO’s India Brochure, there is the claim that India’s resilience in weathering the global downturn and financial crisis has made governments, policy-makers, economists, corporate houses and fund managers believe that India can play a significant role in the recovery of the global economy in the months and years ahead. APCO describes India as a trillion dollar market.

No mention of ordinary people or poor farmers. The focus is on profit, funds and money because for the readers of such documents all of this constitutes ‘growth’ – a positive sounding notion sold to the masses that in reality means corporate profit. It forms part of an ideology that attempts to disguise the nature of a system that has produced austerity, disempowerment and increasing hardship for the bulk of the population and the concentration of ever more wealth and power in the hands of the few who now dictate policies to nation states.

Take a brief look at what happened in Britain when the neoliberal globalization strategy took hold there. As with Modi, Margaret Thatcher was a handmaiden to rich interests.

During the eighties, the Thatcher government set the wheels in motion to shut down the coal mining industry. The outcome destroyed communities across the country, and they have never recovered. Crime-ridden, drug-ridden and shells of their former selves, these towns and villages and the people in them were thrown onto the scrapheap. The industry was killed because it was deemed ‘uneconomical'. And yet it now costs more to keep a person on the dole than it would to employ them at the minimum wage, the country imports coal at a higher cost than it would to have kept the pits open and Britain has to engage in costly illegal wars to secure its oil and gas energy needs, which coal could largely provide (Britain has over 1,000 years of coal supply in the ground). In fact, before 1970, Britain got all its gas from its own coal.

The economics just do not add up. Former miners’ leader Arthur Scargill fought to save the mining industry and now asks where is the sense in all of this (see this, this and this).

The same happened across the manufacturing sector, from steel to engineering to shipbuilding. And a similar process occurred in the fishery and agriculture sectors. In 2010, there were over eight million unemployed (over 21 percent of the workforce), despite what the official figures said.

Britain decided to financialize its economy and move people out of manufacturing to integrate with a neoliberal globalized world order. Ordinary people’s livelihoods were sacrificed and sold to the lowest bidder abroad and the real economy was hollowed out for the benefit of giant corporations who now have near-monopolies in their respective sectors and record massive profits. People were promised a new service-based economy. Not enough jobs materialized or when they did many soon moved to cheap labour economies or they were automated.

Although it’s a vastly different country, if we look at agriculture in India, a similar trend is seen. Almost 300,000 farmers have taken their lives in India since 1997 and many more are experiencing economic distress or have left farming as a result of debt, a shift to cash crops and economic ‘liberalization’.

In a recent TV interview, Devinder Sharma highlighted the plight of agriculture:

“Agriculture has been systematically killed over the last few decades… the World Bank and big business have given the message that this is the only way to grow economically… Sixty percent of the population lives in the villages or in the rural areas and is involved in agriculture, and less than two percent of the annual budget goes to agriculture… When you are not investing in agriculture, you think it is... not performing. You are not wanting it to perform... Leave it to the vagaries or the tyranny of the markets… agriculture has disappeared from the economic radar screen of the country… 70 percent of the population is being completely ignored…”

As policy makers glorify ‘business entrepreneurship’ and ‘wealth creation’ and acquiesce to hugely wealthy individuals and their corporations, it largely goes unrecognized that farmers have always been imbued with the spirit of entrepreneurship and have been creating food wealth for centuries. They have been innovators, natural resource stewards, seed savers and hybridization experts. But they are now fodder to be sacrificed on the altar of US petro-chemical agribusiness interests.

In his interview, Devinder Sharma went on to state that despite the tax breaks and the raft of policies that favour industry over agriculture, industry has failed to deliver; but despite the gross under-investment in agriculture, it still manages to deliver bumper harvests year after year:

“In the last 10 years, we had 36 lakh crore going to the corporates by way of tax exemptions... They just created 1.5 crore jobs in the last ten years. Where are the exports? … The only sector that has performed very well in this country is agriculture... Why do you want to move the population... Why can’t India have its own thinking? Why do we have to go with Harvard or Oxford economists who tell us this?” (36 lakh crore is 36 trillion; 1.5 crore is 15 million)

It all begs the question: where are the jobs going to come from to cater for hundreds of millions of former agricultural workers or those whose livelihoods will be destroyed as transnational corporations move in and seek to capitalize industries that currently employ tens of millions (if not hundreds of millions)?

The genuine wealth creators, the farmers, are being sold out to corporate interests whose only concern is to how best loot the economy. As they do so, they churn out in unison with their politician puppets the mantra of it all being in the ‘national interest’ and constituting some kind of ‘economic miracle’. And those who protest are attacked and marginalised. In Britain during the eighties, it was a similar situation. Workers' representatives portrayed as the 'enemy within'.

Through various policies, underinvestment and general neglect, farmers are being set up to financially fail. However, it is corporate-industrial India which has failed to deliver in terms of boosting exports or creating jobs, despite the massive hand outs and tax exemptions given to it (see this and this). The number of jobs created in India between 2005 and 2010 was 2.7 million (the years of high GDP growth). According to International Business Times, 15 million enter the workforce every year (see here).

Again, this too is a global phenomenon.

Corporate-industrial India is the beneficiary of a huge global con-trick: subsidies to the public sector or to the poor are portrayed as a drain on the economy, while the genuinely massive drain of taxpayer-funded corporate dole, tax breaks, bail outs and tax avoidance/evasion are afforded scant attention. Through slick doublespeak, all of this becomes redefined necessary for creating jobs or fueling ‘growth’. The only growth is in massive profits and inequalities, coupled with unemployment, low pay, the erosion of welfare and a further race to the bottom as a result of secretive trade agreements like the TTIP.

India is still a nation of farmers. Around two thirds of the population in some way rely on agriculture for a living. Despite the sector’s woeful neglect in favour of a heavily subsidized and government-supported but poorly performing industrial sector, agriculture remains the backbone of Indian society.

There was a famous phrase used in the eighties in Britain by the former Prime Minister Harold McMillan. He accused the Thatcher administration of 'selling the family silver' with its privatization policies and the auction of public assets that ordinary people had strived to build over many decades of dedicated labour.

As Modi presses through with his strident neoliberal agenda and seeks to further privatize India's agricultural heritage, it begs the question: is it not tantamount to turning in on yourself and destroying the home in which you live?

Virtual Economy’s Phantom Job Gains Are Based on Statistical Fraud And More Fraud Is in the Works Paul Craig Roberts Washington can’t stop lying. Don’t be convinced by last Thursday’s job report that it is your fault if you don’t…

As the Obama administration continues to alienate almost everyone else around the entire planet, an increasing number of prominent international voices are starting to question why the U.S. dollar should be so overwhelmingly dominant in global trade. In previous articles, I have discussed Russia's "de-dollarization strategy" and the fact that Gazprom is now asking their [...]

A lot of people that I talk to these days want to know "when things are going to start happening". Well, there are certainly some perilous times on the horizon, but all you have to do is open up your eyes and look to see the global economic crisis unfolding. As you will see below, [...]

The numbers that you are about to see are likely to shock you. They prove that the global financial Ponzi scheme is far more extensive than most people would ever dare to imagine. As you will see below, the total amount of debt in the world is now more than three times greater than global [...]

The status of the dollar as global reserve currency is being threatened by new international monetary powerhouses and the limitations of its debt-based control. This week, Ellen speaks with Mark Pash of the Center for Progressive Economics, who believes that issuance of currency as debt has outlived its usefulness and should be replaced with a credit-based model that covers basic human needs prior to personal accumulation of additional affluence. Ellen also speaks with Mike Krauss on petro-dollar politics upending America’s hold on global trade as the reserve currency. On the Public Banking Report, co-host Walt McRee talks with John Leonard of the PA Project about new public banking initiatives in one of America’s abandoned industrial centers, western PA, and the promise that public banking agencies may offer to reviving the economy that region.

Global Research and Countercurrents 30/5/2014 and Deccan Herald 31/5/2014

A new review carried out by the organization GRAIN reveals that small farms produce most of the world’s food. However, they are currently squeezed onto less than a quarter of the world’s farmland. The world is fast losing farms and farmers through the concentration of land into the hands of the rich and powerful. If we do nothing to reverse this trend, the world will lose its capacity to feed itself.

This claim is based on the findings of the report, ‘Hungry for Land’ (1), which states that small farmers are often much more productive than large corporate farms. For example, if all of Kenya’s farms matched the output of its small farms, the nation’s agricultural productivity would double. In Central America, it would nearly triple. In Russia, it would be six fold.

Marina Dos Santos of the Coordination of the Brazilian Landless Movement (MST) states that the peasantry is currently being criminalised, taken to court and even made to disappear when it comes to the struggle for land. Small farmers are constantly exposed to systematic expulsion from their land, which not only affects peasants but also many other small farmers and indigenous peoples who are the target of foreign corporations. Dos Santos says that small farmers want land in order to live and to produce as these are their basic rights against land-grabbing corporations who seek only speculation and profit.

If the current processes of land concentration continue, she argues that then no matter how hard-working, efficient and productive they are, small farmers will simply not be able to carry on.

While it is often stated in official circles that the planet needs to produce more food to feed the growing population, the report suggests that more food could be produced almost immediately if small farmers had access to more land and could work in a supportive policy environment, rather than under the siege conditions they are facing today.

Elizabeth Mpofu, General Coordinator of La Via Campesina, says that the vast majority of farms in Zimbabwebelong to smallholders and their average farm size has increased as a result of the Fast Track Land Reform Programme. Small farmers in the country now produce over 90% of diverse agricultural food crops, while they only provided 60-70% of the national food before land redistribution. Mpofu says that we need to urgently put land back in the hands of small farmers and make the struggle for genuine and comprehensive agrarian reform central to the fight for better food systems.

The world is fast losing farms and farmers in many places, while big farms are getting bigger. One major reason why small farms are disappearing is the rapid growth of monoculture plantations. In the last 50 years, 140 million hectares – well more than all the farmland inChina – have been taken over for soybean, oil palm, rapeseed and sugar cane alone. By definition, peasant agriculture prioritises food production for local and national markets as well as for farmers’ own families. Big agritech corporations take over scarce fertile land and prioritise commodities or export crops for profit and markets far away that cater for the needs of the affluent.

This process impoverishes local communities and brings about food insecurity (2). GRAIN’s Camila Montecinos concludes that the concentration of fertile agricultural land in fewer and fewer hands is directly related to the increasing number of people going hungry every day.

GRAIN’s report relies on statistics that show small farms are technically more productive than big farms. While industrial farms have enormous power, influence and resources, small farms almost everywhere outperform big farms in terms of productivity.

The review comes on the heels of a September 2013 report by the United Nations Conference on Trade and Development (3), which also stated that farming in rich and poor nations alike should shift from monoculture towards greater varieties of crops, reduced use of fertilisers and other inputs, greater support for small-scale farmers and more locally focused production and consumption of food. More than 60 international experts contributed to the report.

The report stated that monoculture and industrial farming methods are not providing sufficient affordable food where it is needed. The system actually causes food poverty, not addresses it.

Numerous high level reports from the UN and development agencies have argued in favour of small farmers and agro-ecology, but this has not been translated into real action on the ground where peasant farmers increasingly face marginalisation and oppression.

Despite what these reports conclude and the evidence that indicates small farms have better productivity, Indiafor example is abandoning the small farmer in favour of foreign agritech corporations. This is resulting in a forced removal of farmers from the land and the destruction of traditional communities on a massive scale. In 2008, former Finance Minister P. Chidambaram envisaged at least 600 million people from rural Indiaeventually shifting to cities, leaving just 15% left to work the land or associated with the rural economy (4).

This process is so severe, so shocking even, that environmentalist Vandana Shiva has called what is happening constitutes the biggest forced removal of people from their lands in history. According to a 2009 report commissioned by the rural development ministry and chaired by the then minister Raghuvansh Prasad Singh, in certain areas ofIndiait also involves the biggest illegal land grab since Columbus(5).

The trend in India, as elsewhere, is being driven by big agritech that is working with the government to ensure a shift away from diversified agriculture that guarantees balanced local food production, the protection of people’s livelihoods and environmental sustainability. Policies that allow for the protection of local seeds and farmers’ rights to use them are paramount. Yet small farmers are being displaced and are struggling to preserve their indigenous seeds and traditional knowledge of farming systems. By patenting and monopolising seeds, big agritech is preventing farmers from saving and exchanging their own seeds that were developed over thousands of years. Agritech corporations are being allowed to shape government policy by being granted a strategic role in trade negotiations (6). They are consequently setting the policy/knowledge framework by being allowed to fund and determine the nature of research carried out in public universities and institutes (7).

Throughout the world, we continue to witness land grabs for non-food crops, industry or real estate interests, monocultures for export and the hijack of agriculture by big corporations backed by their co-opted scientists, media outlets and politicians (8) who continue to propagate the myth that they have the answer to global hunger and poverty. Despite mounting evidence that they do not, they continue to colonise agriculture all over the world - look no further than Africa where the Gates Foundation, Monsanto and Western governments are placing it in the hands of big agritech for private profit under the old colonialist pretext of helping the poor (9).

A shift from corporate-controlled, profit oriented commodity agriculture is required and involves moving towards more biodiverse organic systems that place emphasis on small farmers, local economies and food sovereignty.

Rather than addressing poverty, food inequality and hunger, big agritech corporations merely serve to perpetuate these problems and exploitative global power relations by sucking power, wealth and food from poorer countries, small farmers and local communities to satisfy themselves, their shareholders and affluent urban consumers in foreign lands. As long as petro-chemical corporate agriculture predominates and is expanded throughout the planet, the less food security and local/national food sovereignty we will see - and the more wars fuelled by oil interests, conflicts over land and water and damage to the environment we shall witness.

"Why are people protesting in eastern Ukraine," asked Paul? "Because they do not believe the government that came to power after the US-backed uprising in February is legitimate."

"They do not recognize the authority of an unelected president and prime minister."

"Would (Americans) accept an unelected government in Washington put in place with the backing of the Chinese and Iranians?"

Washington "gave full support" to violent Maidan putschists. Now they back cracking down hard on Eastern Ukrainian freedom fighters.

They falsely accused Putin of supporting them. "The real question is why (Washington) is involved in Ukraine in the first place," Paul stressed.

We're "broke. We cannot even fix our own economy. Yet we want to run Ukraine. Does it really matter who Ukrainians elect to represent them?"

"Is it really a national security matter worth risking a nuclear war with Russia whether Ukraine votes for more regional autonomy and a weaker central government? Isn't that how the United States was originally conceived?"

"Has the arrogance of the US administration, thinking they should run the world, driven us to the brink of another major war in Europe?"

"Let us hope they will stop this dangerous game and come to their senses. I say let's have no war on Ukraine!"

If you believe that the U.S. economy is heading in the right direction, you really need to read this article. As we look toward the second half of 2014, there are economic red flags all over the place. Industrial production is down. Home sales are way down. Retail stores are closing at the fastest pace [...]

By Susan Duclos

The evidence is piling up as reports come in that China, New Zealand, Russia, India and others are all signing agreements to trade directly using their individual currencies without first converting them to the dollar, which each and every instance puts another nail in the dollar's coffin.

It was reported in November 2013, that 23 countries have begun setting up swap lines to bypass the dollar.

March 3, 2014, James Turk told King World News "“History shows that when economic activity is weak and the standard of living stops improving, political rhetoric and saber-rattling follows, which often lead to war. It is easier for a country’s politicians to blame neighbors rather than themselves for the misguided policies they are pursuing which have caused the economy to suffer."

For those asking why Barack Obama, representing the US, and our European allies would poke the bear, so to speak, in provoking Russia with their actions to destabilize Ukraine, then threatening Russia when they moved into Crimea to protect their interests and the Russian population there, this is your answer.

Distract the focus from the policies that have crippled the US and put us on the path to total collapse, with starting a war by forcing Russia to act aggressively, then blame it all on Russia.

In December of 2013, Gerald Celente said "Absent the war card, I think we will see a financial crisis before the end of the second quarter of 2014."

The second quarter of 2014 starts on April first and ends on June 30, 2014......

One way or another, Barack Obama and Europe, who is also suffering economically, will provoke World War III.

It won't be about Ukraine, Russia, China, Syria or the Middle East, lives will be lost by the millions for no other reason than to deflect from the cause of the dollar dying and the chaos that will occur afterwards.

Stock up on gold and silver folks because your dollars won't be worth the paper it is printed on.

Two videos below, one from TheLipTV where the Buzzsaw show interviews Fabian Calvo about the signs to look for on the impending global economic reset, where the US dollar will no longer be the world reserve currency. The second video is an excellent explanation, clear and concise on the dead dollar walking, by Stefan Molyneux, where he provides the truth about government debt.

Is the U.S. economy steamrolling toward another recession? Will 2014 turn out to be a major "turning point" when we look back on it? Before we get to the evidence, it is important to note that there are many economists that believe that the United States never actually got out of the last recession. For [...]

By Susan DuclosA war just as devastating as a military war without destroyed cities and states from bombs dropping as a result, but instead a currency war destroys from within, which will result in chaos on the street, martial law, food riots...etc..Th...

Nixon, Rockefeller, IG Farben, and global control by Jon Rappoport February 28, 2014 www.nomorefakenews.com To learn why Richard Nixon was really blown out of the White House, you could begin with the infamous Nazi chemical/pharmaceutical cartel, IG Farben. The cartel that pushed Hitler over the top into power in Germany. One of its lasting legacies […]

If you have been waiting for the "global economic crisis" to begin, just open up your eyes and look around. I know that most Americans tend to ignore what happens in the rest of the world because they consider it to be "irrelevant" to their daily lives, but the truth is that the massive economic [...]

On Tuesday, new Federal Reserve Chairman Janet Yellen went before Congress and confidently declared that "the economic recovery gained greater traction in the second half of last year" and that "substantial progress has been made in restoring the economy to health". This resulted in glowing headlines throughout the mainstream media such as this one from [...]

Cutting up news of the economy exposes the essence by Jon Rappoport January 30, 2014 www.nomorefakenews.com Government and media periodically release reports about the state of the economy. It’s up, it’s sideways, it’s recovering, and so on. Reading such reports is like reading background information on the weather. Lots of data, dubious value, and twisted […]

Have you been paying attention to what has been happening in Argentina, Venezuela, Brazil, Ukraine, Turkey and China? If you are like most Americans, you have not been. Most Americans don't seem to really care too much about what is happening in the rest of the world, but they should. In major cities all over [...]

Bold proposals to prevent war and enlarge the scope of human freedom have been advanced
for centuries. Even before the industrial revolution transformed aggression from
a regional tragedy into a global threat, philosophers and politicians began to
look and think beyond the borders of their nations.

For the
French revolutionist Jean Baptiste du Val-De-Grace, the answer, in 1792, was a
World Republic that would place human rights above the rights of individual
states. All peoples would have cultural autonomy, he imagined. Three years
later, the German philosopher Immanuel Kant proposed a more modest plan: a
confederation of nations. Urging world citizenship and freedom of movement,
Kant hoped that a “covenant of peace” would ultimately make national conflict
obsolete.

Throughout
the next hundred years, diplomats and statesmen struggled with formulas for
transnational order. Finally, in 1899, on the initiative of Czar Nicholas, an agreement
– The Hague Treaty – was reached between 24 states. Recognizing that modern
warfare and weapons posed a threat to all humanity, these nation-states pledged
at least to attempt settling their differences through “pacific methods” rather
than force and violence.

Ten million
people died during World War I anyway.

The massive
violence of that conflict was a sign that few nations could ignore. In the
aftermath, treaties outlawing war were signed, and the League of Nations was
established. Like confederal plans before it, however, the League was complex
and largely ineffective, both burdened with responsibilities and deprived on
real authority. Despite human rights declarations dating from 1789 in France,
the League still represented only states, with no allusion in its charter to
the sovereignty of ordinary people much less humanity. Within four years after
its creation, it inevitably began to split into hostile alliances.

During the
next World War, at least 60 million people died, more than half of them civilians, and
in 1945 the “nuclear age” crashed into existence when atomic bombs were dropped
on two Japanese cities. The very nature of war had become global. The survival
of humanity was now at stake. The nation-state war game, however, continued
unabated. By this time, the concept of world government could no longer be
shrugged off as some utopian novelty. The possibility of nuclear warfare made
the choice all too clear: global order or oblivion. But what kind of order?

The United
Nations, launched within that same fateful year, 1945, was more like a forum
than a government. It could not legislate on worldwide problems, nor enforce
its views through any means but military action. Its members, all
nation-states, still remained absolutely sovereign, free to make treaties or
declare war without a nod to the UN.

National
citizenship had become a collective suicide pact.

Over the
next four decades, whenever UN decisions or Charter provisions stood in the way
of some “national” desire, they were routinely ignored. As the Cold War gave
birth to the nuclear arms race, as more than 50 armed conflicts between nations
“great” and “small” created millions more victims, it became all too clear that
this latest attempt to create peace through a confederation of nation-states
was no more than a sterile exercise in futility. War, deprivation and torture
gave grim daily testimony to the fact that the UN was virtually powerless to
protect and promote peace or human rights. Could it be any other way? Was it
even possible for sovereign nations to surrender the right to “defend”
themselves through war?

Writing as
the United National Charter was being designed in 1945, Emory Reves provided an
answer: war was avoidable only if some “higher” legal order was imposed. In Anatomy of Peace, he explained:

“The real
cause of war has always been the same. They have occurred with a mathematical
regularity of a natural law at clearly determined moments as a result of
clearly definable conditions… 1. Wars between groups of men forming social
units always take place when these units – tribes, dynasties, churches, cities,
nations – exercise unrestricted sovereign power. 2. Wars between social units
cease the moment sovereign power is transferred from them to a larger or higher
unit…In other words, wars always ceased when a higher unit established its own
sovereignty, absorbing the sovereignty of the conflicting smaller social units.”

So long as
the nation-state’s self-imposed amnesia persists, wars are inevitable. Like
previous attempts to “rationalize” conflict without a fundamental transfer of
sovereign power, the UN can only succeed in isolated cases, when armed conflict
no longer serves the selfish interest of the belligerents. Mainly, it is a hostage,
politically and financially, of the system it is expected to transform.

But if the
confederal approach is not the form of “higher authority” that can break
nationalism’s spell, moving us to a workable and democratic world order, what
is?

Responsible Global Citizenship

We live in a
geocentric world of nation-states, preoccupied mainly by “national” problems of
the economy, society and politics. No matter where we live, for most of us the “nation”
is the center of our political universe – the immovable point around which
revolve other nations and, supposedly, the rest of the world.

Our
attachment to our nation is not merely legal; it is profoundly emotional. Yet
when nations deal with other nations, these attachments are given no weight. In
the usual “international” context, the individual is nowhere to be found.
Still, all nations claim to represent the very people they so often ignore.
Ironically, most nations actually claim to derive their very legitimacy from
their citizens. But if individuals, the people themselves, are truly the source
of each nation’s authority, it follows that humanity as a whole rather than any
nation is the highest source of authority.

The
accumulated power of nation-states does not make them the only legitimate
participants in global decision-making. In a world threatened by war and
injustice, “responsible citizenship” can only mean a powerful assertion of
humanity’s ultimate sovereignty. As Thomas Paine explained it, “individual
human beings, each in his or her own personal and sovereign right, enter into a
compact with each other to produce any government.”

For a higher
authority to come into being, therefore, a new compact is needed, a global
civic contract that transcends the national paradigm. The good news is that
such a contract already exists, both naturally and legally.

The World
Government of World Citizens, which was established in 1953, is both an
extension of the individual and an expression of humanity as a whole. It grows
from your sovereignty and mine as world citizens, and from our commitment to
each other’s protection and survival. It is a horizontal network based on
natural rights and the human rights affirmed by both national constitutions and
international agreements like the Universal Declaration of Human Rights. It is
also “vertical” as the political expression of a world community by those who
recognize only the geographic limits of the planet itself.

In 1945,
while observing delegates at the founding of the UN in San Francisco, E.B.
White wrote: “Whether we wish it or not, we may soon have to make a clear
choice between the special nation to which we pledge our allegiance and the
broad humanity of which we are born a part.” World Citizens are those who make
the latter choice.

In a more
practical sense, World Government is an outgrowth of the world citizenship
movement that began in the late 1940s. As the start, it was simply a tool, a
way to embody the transnational civic identity that was being adopted by the
many people who registered as world citizens beginning in 1949. Gradually,
however, it became more: an embryonic structure for the evolution of a global
civism. Once its administrative arm, the World Service Authority, was
established in 1954, the first full phase of work began. The WSA began identifying
people from all corners of the planetary community, issuing documents to those
who pledged allegiance to this global government.

In the years
since that beginning, WSA and World Government have aimed to overcome the
psychological barriers imposed by the polarized, dualistic nation-state system.
In one sense, its very existence and the documents used by its citizens expose
the anti-democratic core of most nation-states. But for many people – refugees
and other outcasts of the system – its value is more basic. For them, World Government
means global political asylum.

Elements of various
religious teachings and democratic theories converge in the conceptual
framework of World Government. It represents a holistic way of thinking about
oneself and the planet. The deeper one goes, the more profound the potential
transformation can be.

Today our
world remains deafened by the roar of chaos and conflicting loyalties. But once
the possibility of an alternative can be envisioned, it becomes clear that the
primary causes of the chaos are the nation-states themselves. National
governments cannot solve our problems. They are the problem.

How World Citizenship Works

It does not
demand the surrender of any freedom, the renouncing of “national” citizenship,
or any disloyalty whatsoever to the nation of one’s birth. Rather, world
citizenship replaces the anachronistic political system that emerged in the 18th
century with a global contract that recognizes the dynamic interdependence of
our time.

We are already
linked across artificial frontiers; neither mass communication, science,
commerce nor ecology recognizes national borders. In these areas and more, we
already have one world. All types of barriers are crumbling. World Government
makes our politics more consistent with reality.

As it has
evolved, the World Government of World Citizens has responded to the needs of
its citizens not only by issuing documents such as birth and marriage
certificates, visas and passports. It has also begun to establish other basic
organs of government: study commissions, a court, political party, police force
and monetary system. The World Court of Human Rights, for example, was
established in France by a General assembly of World Citizen in 1972. A
provisional statute for the court was subsequently drafted, and still later the
World Judicial Commission was set up to handle preliminary complaints filed by
world citizens. The International Court of the Hague, we discovered, only handled
cases between sovereign states, and only if both parties agree to the
litigation. The UN Commission on Human Rights is powerless to help individuals
when their freedom and the arbitrary will of a nation-state collide.

World
citizens, whose exercise of human rights can contravene “national laws,” need a
new kind of court, one both grounded on the legal defense of global rights and
accessible to all. As the first Chief Justice of the World Court, Dr. Luis
Kutner explained upon accepting the post, “The international community has come
to realize that human rights are not an issue to be left solely to the national
jurisdiction of individual states. These rights obviously need protection at a
higher level within the framework of international law.”

Over the
years, a variety of study commissions have also been formed to deal with
specific global problems. Experts, all advocates of a just and democratic world
order, have been recruited to pursue research in areas such as health, space,
culture, economics, women, education, forestry, political asylum, communication
and cybernetics.

Unlike most
governments, which are heavily in debt, World Government is self-financing.
Citizens who request services pay modest fees to cover the operating expenses.
The World Refugee Fund and World Citizens Legal Fund have assisted many
refugees, displaced persons and political prisoners, and helped to finance
legal cases for world citizens whose rights have been violated, or who face
prosecution under national laws.

The World
Passport remains the most widely used document, a practical symbol and a useful
tool for travelers. Contributors to the Refugee Fund have made it possible to
issue passports for free to many refugees and war victims, half of them women
and children.

In essence,
world government is a sustainable and self-sufficient community of sovereign
individuals who have given their prime allegiance to an emerging body of “common
world law,” including various human rights covenants, the Stockholm
Environmental Declaration and the Nuremberg Principles. It is neither a
parallel government nor a supra-national federation. It is a meta-government of individual human beings.

By Andrew Gavin Marshall. Cross-posted from Occupy.com it3 15 The Group of Thirty (or G-30) describes itself as “a private, nonprofit, international body composed of very senior representatives of the private and public sectors and academia,” which “aims to deepen understanding of … Continue reading →

It is hard to find the words to adequately describe how much of a disaster Obamacare is turning out to be. The debut of Healthcare.gov has been probably the worst launch of a major website in history, millions of Americans are having their current health insurance policies canceled, millions of others are seeing the size of their health insurance premiums absolutely explode, and this new law is going to result in massive numbers of jobs being lost. It is almost as if Obamacare was specifically designed to wreck the U.S. economy. Not that what we had before Obamacare was great. In fact, I have long argued that the U.S. health care system is a complete and total train wreck. But now Obamacare is making everything that was bad about our system much, much worse. Americans are going to pay far more for health care, the quality of that care is going to go down, they are going to have to deal with far more medical red tape, and thousands upon thousands of U.S. employers are considering getting rid of the health plans that they offer to employees altogether due to Obamacare. If the U.S. health care system was a separate nation, it would be the 6th largest economy on the entire planet, and now Obamacare is going to absolutely cripple it. To say that Obamacare is an "economic catastrophe" would be a massive understatement.

Of course we were assured that it wouldn't turn out this way. We were promised over and over that we were going to pay less for health care, get better coverage, and be able to keep our current health plans if we were pleased with them. The following is what Obama said at a rally in 2009...

"First of all, if you’ve got health insurance, you like your doctors, you like your plan, you can keep your doctor, you can keep your plan. Nobody is talking about taking that away from you."

Oh really?

That was such a dramatic lie that even NBC News is turning on him. They discovered that Obama has known for three years that most people that rely on individual health insurance policies would not be able to keep them...

Buried in Obamacare regulations from July 2010 is an estimate that because of normal turnover in the individual insurance market, “40 to 67 percent” of customers will not be able to keep their policy. And because many policies will have been changed since the key date, “the percentage of individual market policies losing grandfather status in a given year exceeds the 40 to 67 percent range.”

That means the administration knew that more than 40 to 67 percent of those in the individual market would not be able to keep their plans, even if they liked them.

Pretty much everything that Obama told us when he was selling us on his plan has turned out to be a lie.

So what can we expect from Obamacare moving forward? The following are 10 signs that Obamacare is going to wreck the U.S. economy...

#1 It is being projected that millions upon millions of Americans are going to lose their current health insurance plans thanks to Obamacare. Most will be faced with the choice of either purchasing much more expensive health insurance or going uninsured. This will put even more stress on a middle class that is already disintegrating rapidly. The following is from the recent NBC News investigation mentioned above...

Four sources deeply involved in the Affordable Care Act tell NBC News that 50 to 75 percent of the 14 million consumers who buy their insurance individually can expect to receive a “cancellation” letter or the equivalent over the next year because their existing policies don’t meet the standards mandated by the new health care law. One expert predicts that number could reach as high as 80 percent. And all say that many of those forced to buy pricier new policies will experience “sticker shock.”

#2 The health insurance premium increases that some families are experiencing are absolutely mind boggling. According to Mike Adams of Natural News, one family in Texas just got hit with a 539% rate increase...

Obamacare is named the "Affordable Care Act," after all, and the President promised the rates would be "as low as a phone bill." But I just received a confirmed letter from a friend in Texas showing a 539% rate increase on an existing policy that's been in good standing for years.

As the letter reveals (see below), the cost for this couple's policy under Humana is increasing from $212.10 per month to $1,356.60 per month. This is for a couple in good health whose combined income is less than $70K -- a middle-class family, in other words.

According to NBC News, an elderly couple in North Carolina was hit with a similar rate increase...

George Schwab, 62, of North Carolina, said he was "perfectly happy" with his plan from Blue Cross Blue Shield, which also insured his wife for a $228 monthly premium. But this past September, he was surprised to receive a letter saying his policy was no longer available. The "comparable" plan the insurance company offered him carried a $1,208 monthly premium and a $5,500 deductible.

Many Americans that were formerly in favor of Obamacare are now against it after they have seen what it is going to do to their budgets. The following is one example of this from a recent Los Angeles Times article...

Pam Kehaly, president of Anthem Blue Cross in California, said she received a recent letter from a young woman complaining about a 50% rate hike related to the healthcare law.

"She said, 'I was all for Obamacare until I found out I was paying for it,'" Kehaly said.

#3 Obamacare actually includes incentives for people to work less and make less money. The following is one example from a recent article by Sean Davis...

In California, a couple earning $64,000 a year would not qualify for health care subsidies. A bronze plan for them through Kaiser would cost them about $1,300 each month, or $15,600 a year. But if that same family earned just $2,000 less, it would qualify for over $14,000 in annual health care subsidies, dropping their premiums for that same Kaiser plan to less than $100 per month.

#4 Thankfully the employer mandate in Obamacare was delayed for a little while, but it will ultimately result in widespread job losses all over the country. In fact, we are already starting to see this happen. The following is from a recent article in the Economist...

BEFORE the recession, Richard Clark’s cleaning company in Florida had 200 employees, about half of them working full time. These days it has about 150, with 80% part-time. The downturn explains some of this. But Mr Clark also blames Barack Obama’s health reform. When it comes into effect in January 2015, Obamacare will require firms with 50 or more full-time employees to offer them affordable health insurance or pay a fine of $2,000-3,000 per worker. That is a daunting prospect for firms that do not already offer coverage. But for many, there is a way round the law.

Mr Clark says he is “very careful with the threshold”. To keep his full-time workforce below the magic number of 50, he is relying more on part-timers. He is not alone. More than one in ten firms surveyed by Mercer, a consultancy—and one in five retail and hospitality companies—say they will cut workers’ hours because of Obamacare. A hundred part-timers can flip as many burgers as 50 full-timers, and the former will soon be much cheaper.

You can find a very long list of some of the employers that have either eliminated jobs or cut hours because of Obamacare right here.

#5 Even if you are able to keep your job, there is no guarantee that your employer will continue to offer health insurance as an employee benefit. In fact, it is being reported that large numbers of employers have already decided to no longer offer health insurance to their employees because of Obamacare.

#6 According to CBS News, so far the number of people that have had their health insurance policies canceled is more than three times greater than the number of people that have signed up for new policies under Obamacare...

CBS News has learned more than two million Americans have been told they cannot renew their current insurance policies -- more than triple the number of people said to be buying insurance under the new Affordable Care Act, commonly known as Obamacare.

#7 If what is going on in New York is any indication, those that are signing up for health insurance under Obamacare are going to have a really, really hard time finding a doctor...

New York doctors are treating ObamaCare like the plague, a new survey reveals.

A poll conducted by the New York State Medical Society finds that 44 percent of MDs said they are not participating in the nation’s new health-care plan.

Another 33 percent say they’re still not sure whether to become ObamaCare providers.

Only 23 percent of the 409 physicians queried said they’re taking patients who signed up through health exchanges.

#8 Obamacare is turning out to be a gold mine for hackers and identity thieves. The personal information of millions of Americans could potentially end up being compromised. According to CNN, Healthcare.gov was found to be teeming with security holes...

The Obamacare website has more than annoying bugs. A cybersecurity expert found a way to hack into users' accounts.

Until the Department of Health fixed the security hole last week, anyone could easily reset your Healthcare.gov password without your knowledge and potentially hijack your account.

And according to the New York Post, Healthcare.gov has been designed so badly from a security standpoint that it might have to be "rebuilt from scratch"...

The chairman of the House Intelligence Committee said ObamaCare’s website, already a tangled mess, might need to be rebuilt from scratch to to protect against cyber-thieves because he fears it’s not a safe place right now for health-care consumers to deposit their personal information.

“I know that they’ve called in another private entity to try to help with the security of it. The problem is, they may have to redesign the entire system,” Rep. Mike Rogers said on Sunday on CNN’s “State of the Union” political talk show. “The way the system is designed, it is not secure.”

#9 As I noted in a previous article, approximately 60 percent of all personal bankruptcies in the United States are related to medical bills. Because millions of Americans are now losing their health insurance policies and millions of others will choose to pay the fine rather than sign up for Obamacare, more Americans than ever will find themselves overwhelmed with medical bills when they get seriously sick. This will result in even more personal bankruptcies.

#10 In the end, the burden for paying for the subsidies that Obamacare offers is going to overwhelmingly fall on the taxpayers. This is going to cause our nightmarish national debt to get even worse. Peter Schiff recently explained why this is going to happen...

It is also ironic that high-deductible, catastrophic plans are precisely what young people should be buying in the first place. They are inexpensive because they provide coverage for unlikely, but expensive, events. Routine care is best paid for out-of-pocket by value conscious consumers. But Obamacare outlaws these plans, in favor of what amounts to prepaid medical treatment that shifts the cost of services to taxpayers. In such a system, patients have no incentive to contain costs. Since the biggest factor driving health care costs higher in the first place has been the over use of insurance that results from government-provided tax incentives, and the lack of cost accountability that results from a third-party payer system, Obamacare will bend the cost curve even higher. The fact that Obamacare does nothing to rein in costs while providing an open-ended insurance subsidy may be good news for hospitals and insurance companies, but it's bad news for taxpayers, on whom this increased burden will ultimately fall.

Gaza's Tunnel Economyby Stephen LendmanThey're a vital lifeline. They're a potential death trap. They're a bonanza for profiteers. They symbolize Palestinians' will to survive. It shows their determination to do so against all odds.Decades of Israeli v...

A report by an international foundation on modern slavery has revealed that nearly 30 million people are enslaved across the globe. The index released by the Walk Free Foundation (WFF) on Thursday said the slaves are either trafficked into brothels, forced into manual labor, fall victims to debt bondage, or are even born into servitude.

The budget brinkmanship has cost the world’s largest economy billions of dollars – as well as the trust of investors around the globe. And it also sparked calls to de-americanize the world economy. For more, RT talks to Pepe Escobar, Asia Times Online roving correspondent.

Earlier this month, National Security Agency (NSA) head Keith Alexander admitted that he had lied to the U.S. Congress and the American people in an attempt to justify the NSA’s growing surveillance of U.S. citizens.[1] In June, while attempting to…

It’s an idea whose time has come.On October 13, China’s official press agency Xinhua headlined “Commentary: US fiscal failure warrants a de-Americanized world.” More on this below.Thomas Jefferson once warned:“If the American people allow the banks to control…

An Overview of the United States National DebtThe Current Outstanding Public Debt of the United States is:$16,738,183,526,697.32Every man, woman and child in the United States currently owes $55,092 for their share of the U.S. public debt

This article discusses the potential health risks of genetically engineered foods (GMOs). It draws on some previously used material because its importance bears repeating. It also cites three notable books and highlights one in particular – Jeffrey Smith’s “Genetic Roulette:…

Dear Readers, Friends and Fighters for Truth in Media,Day in and day out, people are tuning in to Global Research to find out what is going on in the world. Often, the headlines leave little room for optimism. Threats…

Developments in two major US cities underscore the anti-working class agenda underlying the Obama administration’s Affordable Care Act (ACA), popularly known as Obamacare.On Monday, Detroit Emergency Manager Kevyn Orr announced that health insurance is being eliminated for retired city…

Manufacturing Dissent is a documentary posthumously dedicated to Syrian Palestinian actor Mohamad Rafea, who was kidnapped, tortured and finally brutally murdered on Sunday November 4th 2012 by terrorist groups that have been set loose on the country since the US, UK and their western and Gulf State allies launched a covert war in Syria in early 2011, dressed up by the media as a “revolution”. The words spoken in this video by Rafea, and the courage he shows here, is why he was murdered.

As with GM crops, a host of unforeseen consequences may develop when we begin modifying humans with genes their children will inherit. But another argument against germline modification is that it will lead to designer babies and a new class of underdogs…

Amid reports of an emerging deal between Senate Democrats and Republicans on lifting the debt ceiling and funding the government through the beginning of next year, the social impact of the US government shutdown continues to spread.The deal being…

Free and open expression is our most fundamental right. Without it all others are endangered.Candidate Obama promised transparency, accountability, and reform. He called sunlight “the best source of information about waste, fraud, and abuse.”He said whistleblowing reflects “acts…

The Conservative-Liberal Democrat coalition and Britain’s intelligence chiefs have launched a counter-offensive against whistleblower Edward Snowden in an effort to legitimise and continue their spying on the UK population and much of the world.Last week, Britain’s new head of MI5,…

As the US government shutdown enters its third week, it has become increasingly evident that the ongoing crisis and threat of a federal default is being used to create the political framework for the intensification of attacks on the working…

The Committee to Protect Journalists (CPJ) issued 30-page report October 10, titled “The Obama Administration and the Press,” describing the punitive treatment meted out by the administration against critics and whistleblowers. It details policies enacted by the administration which block…

Negotiations between the White House and congressional Republicans over a deal to extend the US debt limit, reopen the government, and slash social spending, continued Friday evening, with both sides hoping to reach a agreement before stock markets open Monday.Obama…

In India, the race for the 2014 national elections is heating up. The country faces many issues and, with 17% of the global population, how it resolves them could have a large bearing on the future direction of humanity, or could even be an inspiration for it.

India is where modernity is meeting tradition head on. But it is a specific form of ‘modernity’, one which has been defined by powerful transnational corporations. It goes under the guise of ‘globalisation’, which is too often confused with genuine mutual interdependence between nation states. Based on this misrepresentation by corporations, politicians and the mainstream media, we are encouraged to regard globalisation as a positive thing.

And yet the ratio between the top and bottom ten per cents of wage distribution has doubled since the early 1990s, when India opened up it economy. Moreover, social and cultural traditions dating back thousands of years are being uprooted thanks to a redefining of the individual in relation to the collective, of how people should live and what they should aspire to be like, ably assisted of course by an all pervasive advertising industry. This is the cultural impact of ‘globalisation’ – an acceptance that gross inequalities are necessary and beneficial and that tradition must be swept aside in the name of progress.

But this warped culture of globalisation merely reflects the ideas and ultimately the practices of the powerful, the extremely wealthy of the world. These are the people setting the globalisation agenda at the G8, G20, NATO, the World Bank, and the WTO. They are from the highest levels of finance capital and transnational corporations.

These billionaires comprise a transnational capitalist class which dictates global economic policies. In his book ‘The Global Power Elite and The World They are Making’, David Rothkopf puts their number at around 6,500 individuals globally. They are increasingly internationalised and regard nations not as sovereign entities, but as little more than population holding locations to be plundered. In many instances, their corporations have more wealth than many nation states.

Small wonder then that there is an ongoing war in the ‘tribal belt’ and other violent conflicts elsewhere in the country. They are a means to an end. And that end is to facilitate corporate takeovers of food, agriculture, resources, land, public infrastructure and water. Powerful foreign and India corporations with the full military backing of ‘their’ politicians - the ex-bankers, the Western educated elite politicians that they helped put in place to do their bidding - have been facilitating grab lands for various industries, such the nuclear, real estate and resource extraction.

Successive governments have signed secretive ‘Memorandums of Understanding’ with corporations and have then proceeded to target some of the poorest people in the country who resist.

But these are the types of things that happen when powerful corporations and their stooges prize open a nation’s economy with promises, lobbying, bribes, threats or lop-sided trade deals. And they have the media and their bought-and-paid-for politicians to deceive populations that this represents ‘progress’ and ‘development’.

People are encouraged to sit back and watch Indian society get hollowed out because it is good for ‘the country’ or in the ‘national interest’. It’s not unique to India. It has already happened in the US and UK, with governments having facilitated the free flow of capital around the globe leading to the offshoring of their manufacturing bases to cheap labour economies for ever greater profit.

In India, successive governments have already placed part of agriculture in the hands of powerful Western agribusiness. The effects include biopiracy, patenting and seed monopolies, increasing levels of cancer, the destruction of localised rural economies, farmer suicides, water run offs from depleted soil leading to climate change and severe water resource depletion and chemical contamination.

Traditional agricultural practices are being destroyed by Western agribusiness interests, which work hand in glove with the petrochemical industry and its chemical inputs. From how land is used and food is produced to the quality of what ends up on the plate, both food sovereignty and the health of the nation are under threat. Part of the structural adjustment of Indian agriculture has led to a shift in India from the production of bio-diverse food crops for local consumption to commodities for exports.

The corporate-driven EU-India Free Trade Agreement being hammered out beyond the public’s gaze could well entail India’s finance sector and food retail/processing sectors and investment rules being restructured in favour of transnational corporations. Meanwhile, industrial developments built with public money and strategic assets, such as energy sources, ports, airports and seeds and infrastructure support for agriculture, are already being sold off.

The impact of ‘globalisation’ is stark. It’s based on the con-trick of neo-liberal, fast-track ‘development’.A promised land of lavish living, but which is ultimately only available to the trickster elite who attained it years ago via cartels, force and duplicity masquerading as the ‘free’ market. A global market rigged, bought and paid for by the likes of the Rothschilds, Rockefellers, Warburgs and other billionaire fraudsters decades ago.

As the race for parliament builds, the electorate would do well to consider from whose pockets certain protagonists crawl out of. Despite nationalistic rhetoric, you can be sure that certain party leaders are jockeying for position to do the bidding of their influential corporate cronies and backers at home and abroad. For them, the cynical manipulation of public sentiment is fine, but it just wouldn’t do to let the fate of the nation rest with the common folk, would it?

Global Research and Countercurrents 19/9/2013 and Kashmir Observer 20/9/2013

For thousands of years, people have been writing about happiness. The ancient Greek philosopher Aristippus concluded that happiness lies in the pursuit of external pleasure. Other philosophers, from Antisthenes to Buddha, have stressed that looking inwards and leading an ascetic life based on virtue, simplicity and inner peace is the route to happiness. And then there are others who seem to think that we can only be occasionally happy in what is essentially a miserable world. The German philosopher Arthur Schopenhauer said that all happiness is an illusion and that life oscillates like a pendulum, back and forth between pain and boredom.

Happiness is, according to the Merriam-Webster dictionary, “a state of well-being and contentment: a pleasurable or satisfying experience.”

For some, happiness runs much deeper than merely being content. Aristotle held that being virtuous was only one aspect of happiness. In the absence of say wealth and intelligence, virtue could only bring about a form of contentment.

But that’s not enough for others. They strive to achieve an ongoing state of bliss, of feeling at one with the universe and everything in it. Through years of meditation, self-reflective practice or consciousness development, they can learn to transcend the illusion of existence and live life on a higher reality. A case of ignoring reality while striving to live out an illusion?

However, let’s not get too caught up in cynicism here. Illusion is all around us – both on a personal level and on a wider political level. The type of society we live in has a huge bearing on happiness or well-being. Perhaps Schopenhauer’s view is increasingly apt in this age of austerity and war-driven advanced capitalism.

But it doesn’t have to be this way.

From Bernays to Albright: ‘their’ happiness, our misery

Virtually every government in the world creates an illusion for its people. Take economic policy. Government policies might hurt us in the short term, but we are all on a one way route to the ‘promised land’ of happiness, or so we are told by the politicians, the corporate media and spokespersons for the ones who make us suffer to ensure they never have to – the privileged elite, the ruling class.

Western governments set out to con ordinary working folk by bringing us war in the name of peace, austerity in order to achieve prosperity and suffering to eventually make us happy. Is there any room for truth? Politicians never like to tell the public the truth. The feel-bad factor is never a vote winner. Best to keep the public in the dark and rely on positive spin. If people knew the truth, they just wouldn’t be happy.

And selling the feel-good factor is all pervasive. In this age of irretrievable materialism, the route to happiness is more goods, better goods, newer goods. A never-ending smorgasbord of commodities to be craved for, which will bring us happiness. In league with private corporations, governments have learnt to play on our desires to create a one-dimensional type of happiness based on consumerism.

In part, Edward Bernays is responsible for this. The father of modern public relations and propaganda, he was expert in manipulating human perceptions of pain and pleasure, misery and happiness. Tap into or shape people’s desires in a certain way, and you can sell virtually any notion of happiness (or reality), regardless of how bogus it may be.

Whether it was whipping up mass fear in the US about the bogeyman of communism or selling the ‘American Dream’ of happiness through consuming goods, Bernays and the advertising industry, which took its cue from him, were able to marry misery and happiness together – if you do not buy into consumer capitalism, the alternative will be misery; if you do not buy this or that product, life will be terrible; if you do not join in the celebration of capitalism, those awful Soviets will take over and impose a fundamentally unhappy system of equality on each and every one of us.

Under American capitalism, the lie was that everyone would all live happily ever after because of, not in spite of, gross inequality, massive privileges and disadvantages and exploitation of labour, which all went under the notion of meritocracy and a fair day’s work for a fair day’s pay.

Bernays’ propaganda techniques set the stage for con-trick of ‘liberal democracy’. The US government quickly learned that angels and demons could be manufactured out of thin air and, from Guatemala, Congo and Vietnam to Iraq, wars and destabilisations could be built on packs of lies – lies about evil-doers about to kick down the door, lies about the impending misery they would inflict on the US and on far away countries and lies about the government delivering us from impending doom.

Of course, it is best to arm ourselves to the teeth with nuclear weapons to ensure no one imposes their miserable regimes or awful ways of life on us. And to prevent us all shuddering with the fear of the threat of nuclear Armageddon on a daily basis, it’s a case of don’t worry, be happy, forget about it and watch TV. Even the very real danger of near-instant annihilation of the species is shoved to one side for the sake of a feel-good culture.

And the best way to instil that feeling is to have us endlessly treading around a wheel in a cage. Millions are locked into the pursuit of the Bernay’s model of happiness. They are locked into addiction. Addicted to the pursuit of acquisition, of hedonism, of chasing the dream. Addicted to the belief that there is a point to it all, where happiness is achieved by acquisitive materialism.

But, to paraphrase a sentiment from Buddhism: someone, somewhere, may well be suffering on our behalf for this happiness, this hedonism. There is no ‘may be’ about it.

So much blood has been spilled by those unfortunate enough to have been born in certain parts of the world on behalf of people in other parts of the world who deem the need to possess resources to be more worthy than the lives destroyed in order to grab them. Recall Madelaine Albright saying the deaths of 500,000 Iraqi children was a price worth paying for furthering the geo-political interests of US corporations. And yes, a drone attack here, some ‘collateral damage’ there, and those boys in the US control centres are happy with a hard days killing.

In the US Declaration of Independence, there is the phrase “Life, liberty and the pursuit of happiness.” Freedom and happiness (or the pursuit of it) is central, albeit built on the misery of others.

‘Life’, ‘liberty’ and ‘happiness’ have become debased. Fed to the masses, happiness has been confused with excessive individualism and the never-ending pursuit of material goods. It became hijacked by the likes of Bernays. With his knowledge of psycho-analysis (Sigmund Freud was his uncle), he knew it was relatively easy to manipulate desires and get people hooked on indulging in certain behaviour, even if ultimately they don’t really want or need those consumer products, those ‘false needs’, they strive to acquire. Getting them hooked is what really counts.

You have no time to think about the disillusionment because you are all too busy buying the next quick-fix for happiness product. It’s called retail ‘therapy’ for good reason. A therapy that has no long-term benefit. It’s a feel-bad, feel-good then feel bad again spiral.

But who needs this form of ‘happiness’, this type of ‘liberty’, ultimately underpinned by an Albright-esque view of life and death? No one. Yet the masses are encouraged to swallow the lies. The propaganda is pervasive.

Look no further than all those feel-good Hollywood trash films, passed off as ‘blockbusters’, that gloss over or usually ignore all the mundane, miserable aspects of life in working class ‘America’. Little wonder half the world seems to want to live in the US. The need to portray a bogus notion of happiness has served to kick reality into touch. The Hollywood propaganda machine has seen to that.

The ‘wealth creators’ and their crimes against humanity

The great ‘American Dream’ was built on craving and propaganda. It was built on stripping the environment bare, on the unsustainable raping of nature to fuel profits, perpetual war and misery and suffering. The sociologist C.Wright Mills noted the existence of a post-war power elite in the US back in 1956. An integrated power elite of big corporations, the military and the political establishment. Fast forward 57 years and it is responsible for a body count of ten million dead and counting (1), a statistic, a dirty secret that Hollywood will never tell. Ten million slaughtered in US-backed wars and by death squads, covert ops and destabilisations (2). Drug-running and the exporting of terror and murder, glorified by countless Hollywood icons, commentators and politicians under the banner of championing freedom and democracy.

The system in place exists to benefit not the majority, but small a minority of just 6,000 to 7,000 people (3). These are the extremely wealthy of the world who have cemented their position on the back of their ancestors and hundreds of years of capitalism. These are the people setting the globalisation and war agendas at the G8, G20, NATO, the World Bank, and the WTO. They are from the highest levels of finance capital and transnational corporations (4,5). These billionaires, this transnational capitalist class, dictate global economic policies and decide on who lives and who dies and which wars are fought and inflicted on which people. Although they are having a bit of difficulty in kick-starting it right now, with their see-through lies and hypocrisy, Syria is a case in point.

Their crimes against humanity are never mentioned as such. Instead, these people are called ‘wealth creators’. They are the self anointed role models and captains of industry. The high flyers who have stolen ordinary people’s wealth, who have stashed it away in tax havens, who have bankrupted economies because of their reckless gambling and greed and who have imposed a form of globalisation that results in devastating destruction and war for those who attempt to remain independent from them, or structurally adjusted violence via privatisation and economic neo-liberalism for millions in countries that have acquiesced.

Little wonder then that attempts to redress the balance, to snatch control away from this criminal class, have been brutally suppressed over the decades. From democratic leftist organisations to any government pursuing a socialist alternative, this class has used intelligence agencies or military might to attempt to subvert or annihilate any opposition.

From El Salvador and Chile to Egypt and India’s tribal belt, ordinary folk across the world have been subjected to policies that have resulted in oppression, poverty and conflict. But this is all passed off by politicians and the corrupt mainstream media as the way things must be. And anyone who stands up to this lie is ridiculed at best or spied upon, tortured and killed at worst in order to prevent the truth from emerging. And that truth is that many of us know what ‘happiness’ really is, the type of society necessary to establish it - based on communality and economic equality - and that the immensely wealthy people who stand in its way do all things necessary to prevent us from having it. Socialism is not a dirty word.

Various well-being surveys indicate that happier societies invest heavily in health, welfare and education, are more equal and live within the limits imposed by the environment. Many less wealthy countries (and wealthy) do well in such surveys because cultural priority is placed on family and friends, on social capital rather than financial capital, on social equity rather than corporate power. It’s no coincidence that people in places like Britain and the US appear to be less happy than they were 40 years ago (6).

Karl Marx knew that self actualisation was to be truly achieved in a society that makes it possible for someone to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as he has a mind. Being ‘happy’ is state of being, a state of worthwhile endeavour freely chosen and not imposed. It is not achieved through the pursuit of an ultimate unattainable elusive goal on a never ending treadmill of drudgery, a never ending treadmill of control. Not a fixed end point to be achieved by possessing a hundred latest, cutting edge consumer gadgets and indulging in the individualised competition of conspicuous consumption that proclaims ‘look at me, I’m better than you, I’m elevated from the crowd’. And by elevating oneself in such a way, the gregarious human animal is cut off from the wider group and may ultimately become rather unhappy.

And yet it is ordinary working class men (and women) who sign up to join the military and support this system on behalf of these immensely wealthy people. Such people have however always been adept in manipulating the masses to rally around flag and nation, evoking an emotive misplaced sense of patriotism to pursue their militarism or justify their exploitation.

In his book ‘A people’s History of England’, The Marxist academic AL Morton documented how ordinary people, over many hundreds of years, set out to challenge these rulers and often paid with their lives. Nothing ever came for free and ordinary working people fought tooth and nail for any rights that they managed to obtain.

Such a travesty then, that today, ordinary people are denied economic opportunities because this class has sold their jobs to the lowest bidder in India, China or elsewhere. This class and its ‘think tanks’ were determined to shatter the post-war Keynesian consensus based on a robust welfare state and government intervention in the economy to help secure full employment. Any notions of ‘fairness’ and the benefits to be derived from the welfare state were to be substituted for positive notions about the free market and individual responsibility in order to justify the real intention of shifting the balance of power towards elite interests.

With workers’ wages having been depressed over a period of decades, demand having thus been propped up by debt and bankers demanding to be bailed out, how convenient that the lie of ‘austerity’ is being used as a battering ram to finish off what the likes of Reagan and Thatcher did in the 80s with their pro-big business, pro-privatisation, anti-union, anti-welfare policies.

And we are supposed to thank ‘them’ for this? To vote for ‘their’ politicians, to join in a media circus to celebrate the birth of another royal parasite, to support their killing in Syria, in Libya, in Afghanistan, in Iraq and elsewhere?

Yes, we are supposed to back them and take in the poisonous lie that ‘we are all in it together’. And ordinary young men (and women) are supposed to sign up to fight their wars.

The working classes, the great, great grandchildren of the cannon-fodder ‘heroes’ sacrificed en masse on the blood-soaked battlefields of countless other wars that have gone before can now join up to fight again. For what? Austerity, powerlessness, imperialism, propping up the US dollar. For whom? Monsanto, Occidental Petroleum, BP, JP Morgan, Black Rock, Boeing and the rest.

The US economy has been hollowed out. Much of manufacturing has been shipped abroad. For those who benefitted, the US can go to hell in a handbasket, and it has. Meanwhile, for them, record profits ensue. It’s the ability to maximise profit by shifting capital around the world that matters to them, whether on the back of distorted free trade agreements (7) which open the gates for plunder, or through coercion and militarism (8) which merely tear them down.

In places like India, it cuts both ways. ‘Free’ trade and a state enforced militarism that both result in countless deaths and the forced removals of hundreds of thousands of the nation’s poorest folk from their lands and villages for the benefit of powerful corporations and a bogus notion of development. “I love my India” well-off ordinary urban dwellers often say. Patriotism has always been a distraction, a tool to be ignited by the oppressors at will among the masses.

As societies become hollowed out, with empty echoes of patriotism ringing out, they increasingly resemble boxes. The only thing inside however is a giant, brutal mechanical hand. There is nothing else apart from it. And it’s only function is to pull the lid shut if anyone ever dares to tear it open and shed light into the box. If successful, they will see the immorality, the lies, the hypocrisies. The social control based on the subversion of life, liberty and happiness.

3) David Rothkopf, SuperClass: The Global Power Elite and the World They are Making (New York: Farrar, Straus, and Giroux, 2008).4) William I. Robinson, A Theory of Global Capitalism: Production, Class, and State in a Transnational World (Baltimore: John Hopkins University Press, 2004).

When the financial market crisis in 2007 and 2008 threatened the global economy, governments around the world stepped in and bailed out many financial institutions, which were on the brink of collapse. Large amounts of private debt were transformed into public debt. In the Eurozone, this resulted in the sovereign debt crisis. In his excellent book The Great Eurozone Disaster: From Crisis to Global New Deal (Zed Books, 2012), Heikki Patomäki not only provides an insightful analysis of the crisis, but he also makes clear recommendations for the best way out of crisis.

Patomäki’s argument is in many respects a classic Keynesian analysis. He correctly points out that ultimately the global financial crisis was only the trigger of the sovereign debt crisis. Insufficient demand unevenly distributed across the European Union (EU) and the neo-liberal institutional set-up of the Economic and Monetary Union (EMU) were the real problems. ‘The difficulties facing the European Monetary Union have been primarily caused by the asymmetries in the formation of overall demand in the European political economy as a whole, and also by the institutional arrangements and restrictions that were put in place by the Maastricht Treaty’ (P.79). A successful solution to the crisis, for Patomäki, consequently, needs to tackle the question of demand. ‘A sufficient level of effective aggregate demand is an essential requirement for adequate real investments and economic growth’ (P.49).

When reflecting on potential future scenarios, Patomäki identifies three different alternatives: ‘According to the first scenario, the neoliberal European project will continue and deepen; in the second scenario, the EU will develop into a social-democratic federation of states and a world power; but in the third scenario the EU will pursue transformations of global governance and promote democratic and social goals, understanding itself as part of a much wider dynamic whole’ (P.108). The current EU policies around the so-called Fiscal Compact and its focus on fiscal discipline, the first scenario, are considered disastrous. ‘When a sufficient number of EU states decide to cut public spending at the same time, it has a marked negative impact on the level of effective aggregate demand within the whole of the EU’ (P.83). The second scenario, the Euro-level, social-democratic federation, would be in a better position to address the problem of aggregate demand spread equally across the EU.

The real solution for Patomäki, however, lies in the EU becoming part of a democratic global Keynesianism. This would include the re-regulation of financial markets within a setting of new global institutions, perhaps including even a global central bank, with the goal to manage trade deficits and surpluses. ‘Needed are the sorts of global governance mechanisms that can shape the supply of money in the system, balance surpluses and deficits on an equitable basis, and direct the formation, composition and distribution of economic growth’ (P.168). His vision includes a world parliament to ensure the democratic nature of the new system as well as respect for ecological issues. In sum,

‘global Keynesianism is an approach that frames questions of public economic policy and politics more generally on the world economic scale. Global Keynesianism aims to regulate global interdependencies in such a way as to produce stable and high levels of growth, employment and welfare for everyone and everywhere, simultaneously. Global Keynesianism is an ecologically responsible doctrine: governing interdependence could not otherwise by sustainable’ (P.175).

Nevertheless, as impressive as Patomäki’s analysis clearly is, and as nice as it would be to have a ‘global Finland’ characterized by equality, democracy and social justice, there are serious flaws in his historical understanding as well as recommendations for the future. Most importantly, it is his (mis-) understanding of the capitalist social relations of production, which causes a number of problems in his analysis. In line with his Keynesian focus on demand levels and related issues of distribution of wealth, he completely overlooks the way exploitation is rooted within the way of how production is organised around wage labour and the private ownership of the means of production as well as the related, fundamental class conflict between labour and capital.

A different understanding of the capitalist social relations of production has implications for how we can explain the current crisis in the first place. Rather than pointing to the lack of regulation (P.37) and personal greed (P.39), from a historical materialist perspective the emphasis is on the structural crisis tendency of capitalism. The fact that so many US financial institutions engaged heavily in the risky subprime mortgage market was not the result of personal greed, but due to competitive pressures forcing one financial institution to obtain the same high profit margin as its competitor, which dealt in subprime mortgages (see also Corruption in the banking industry – the problem of a few ‘bad apples’?).

Moreover, a class analysis results in a completely different understanding of how the Keynesian compromise came about in industrialised countries after World War Two. In contrast to Patomäki’s rather technocratic vision, in which experts, understanding how the economy works, devised a system of demand management, a class analysis makes clear that the welfare state was the result of class struggle. Against the background of the Cold War and on the basis of strong labour organisations at the national level, forged in industrial conflicts at the beginning of the 20th century, labour was in a position to balance the social power of capital. The result was a compromise, in which capital retained the right to own the means of production in exchange for rising wages and an expansive welfare state for workers. In other words, a balance of power in society was absolutely essential. Keynesian ideas provided the economic formula of implementing the compromise in concrete policies.

This has clear implications for the possibilities of global Keynesianism. Rather than establishing new institutions of global governance and a technocratic consensus on the best Keynesian way forward, it is a balance of class power, which is required. However, this is clearly not the case. Globalisation has precisely implied a dramatic increase in the structural power of capital, which has shifted the balance of power at the global as well as national level in favour of capital. After all, the dominance of capital has been behind the neo-liberal shift in European integration since the mid-1980s in the first place.

Nevertheless, even if there was a balance of class power in society at the global level, it is questionable whether global Keynesianism would be feasible within the general capitalist setting. Capitalism has always expanded outward along lines of uneven and combined development. Structurally, in order to continue the accumulation of surplus value, capitalism constantly has to look for new markets and cheap labour elsewhere. This does not, however, lead to equal development, but to highly uneven development and increasing inequality between countries as well as within countries. Ultimately, we can only understand the Keynesian class compromises in industrialised countries, if we see it as a part of the wider global setting. While a degree of equality had been achieved within Northern welfare states, this was also based on, and conditioned by, continuing exploitation of the Global South be it in the area of mineral extraction, be it through drawing on cheap labour of the periphery. Similar to Germany, Nordic countries including Denmark, Finland, Norway and Sweden have historically related on export-led growth, with which their welfare states were financed. It is in these trade relations, in which high value added goods are traded in exchange with labour intensive goods that surplus is transferred from developing to developed countries. In short, structurally, global Keynesianism is simply impossible within the capitalist social relations of production and global uneven and combined development.

Finally, a historical materialist analysis has clear implications for what is required for a viable alternative way forward.Rather than focusing on how the distribution of wealth could be re-arranged within global institutions, the emphasis has to be on changing the capitalist social relations of production, the ‘hidden abode’ within which exploitation takes place. It is the system of the private ownership of the means of production and wage labour, which needs to be changed. Only socializing the means of production can overcome exploitation and inequality.

Trade unions are still searching for an adequate response to the onslaught on workers’ rights as a result of neo-liberal globalisation, manifested in an increasing transnationalisation of production processes, the emergence of an integrated global financial market and the informalisation of working contracts. Employers increasingly play off different national labour movements against each other as a result of global restructuring. SIGTUR, the Southern Initiative on Globalisation and Trade Union Rights, is a specific international response by labour movements from the Global South. In this guest post, Rob Lambert, the co-ordinator of SIGTUR, outlines the organisation’s objectives, history and strategies towards a better world order.

What is SIGTUR?

SIGTUR is an alliance forming movement of democratic unions in the Global South (Latin America, Africa, Asia and Australia).

A Brazilian leader recently argued,

‘SIGTUR is a unique space of like-minded unions in the global south. This is a space where we can discuss freely amongst friends, where we have built a deep unity of purpose, which is not contaminated by the conflicts between WFTU and ITUC. Inside SIGTUR we can debate without conditionalities’ (Johannesburg, June 2013).

Such a voice is shaped by the historical experience of workers in the Global South. This is an experience of plunder and exploitation through trade in resources and persons (the slave trade and indentured labour systems). In this we witness how capital came into being, ‘dripping from head to toe, from every pore, with blood and dirt’. This was the experience of the colonial period, which many activists know only too well through their family stories over generations.

As Malaysian trade union leader Arokia Dass stated,

I am a product of the indentured labor system. My father was forcibly transported from India to Malaysia. I grew up in semi-slave conditions. I experienced inner feelings of racial domination my whole life.

This past has shaped the present as new forms of imperialism reflected in the strategies of global corporations continue the pillage of the Global South, promoting and reinforcing slave like, cheap labour conditions across all continents.

SIGTUR as a space to share our experiences creates a new identity unique to the Global South, which is a potential source of power and commitment.

Past and present repression against unions (see how Korean union leaders are constantly being thrown into jail by their ‘democratic’ government) has formed a particular culture of struggle in the Global South.

The space SIGTUR creates also enables a sharing of organisational experience, so the stronger more well established federations can share their methods of organising and struggle with the newer unions.

SIGTUR is not just a space to share a common southern experience, even though this emerging wider social consciousness is vital to drive the struggle. SIGTUR is a space to develop an alternative vision to that of neo-liberal globalisation.

It is a space to forge, over time, a new, anti-free market politics. This has grown out of the mass protests across the south over the past two decades.

It is a space to challenge global corporations, the banking system and the elites who profit from their exploitation.

Finally, it is a space to find new sources of power and new strategies and to organise action, linking the local to the global to mobilise against these forces. (See section below).

Photo by Rob Lambert

How did SIGTUR come into being?

SIGTUR is the realization of a vision, which COSATU leaders had in the late 1980s, when they sensed that the advent of the free market ideology spelt disaster for working people across the globe and in the Global South in particular.

The then General Secretary of COSATU, Jay Naidoo, asserted that a south/south internationalism needed to be constructed.

COSATU found a willing ally in the Australian trade union movement (the ACTU: Australian Council of Trade Unions) who were themselves concerned about the ‘race to the bottom’ that neo-liberal globalisation represented.

The Australian unions had a strong historical tradition of an activist labor internationalism. After the Second World War they blocked Dutch ships carrying troops to retake ‘their colony’ Indonesia. During the Apartheid era, they placed bans on South African shipping.

And so SIGTUR was born out of a creative, proactive response to the radical market ideology of neo-liberalism, which has created such destruction across the globe.

SIGTUR was launched at a meeting of democratic unions from the Global South in May 1991 in Western Australia.

Members at the founding meeting of SIGTUR, Photo by Rob Lambert

From this small beginning of two labor movements coming together to create something new, the initiative has grown over the past twenty years and now embraces movements in 35 countries and four continents.

What kind of labour internationalism?

COSATU leaders had a simple proposition: if a new style of democratic unionism at a national level in South Africa empowered workers in the bitter struggle against racial capitalism in South Africa, could this model not be applied to organising at an international level.

A new style of democratic unionism evolved in South Africa during the 1970s, one that created space for workers to participate actively. It gave them a voice for it was based on the principle of worker control. It reclaimed their humanity, their dignity. This is the style applied to this southern initiative.

Free market (neo-liberal) globalisation has been socially destructive on a massive scale, right the way across the globe and in the Global South in particular.

The United Nations report

Today the net worth of the 358 richest people in the world, the $ Billionaires, is equal to the combined income of the poorest 45% of the world’s population, 2.3 billion people.

The free market system on a global scale leads to a massive concentration of corporate power. In all sectors, just ten global corporations control 70 per cent of the market. This gives them power greater than most nation states.

Photo by Rob Lambert

They are able to bend governments to their will: undermining laws everywhere, which defend nature and society.

These corporations are themselves driven by the dominance of finance capital. Investment banks, private equity and hedge funds have turned stock markets into casinos, speculating and destabilizing societies across the globe. The ongoing global financial crisis is wreaking havoc across the Global South and in the north, yet no persons or banks have been held to account for the massive losses.

Without doubt, it is hard not to be pessimistic in the face of this combined and coordinated power of capital. However, there is another side to this phenomenal concentration of power. Neoliberalism has led to a very tight integration of the global economy.

Just in time production systems means that companies keep no stock. They are highly dependent on smooth running transport and communications systems.Through systems of outsourcing, global production networks have been created. These systems are highly integrated. Companies are utterly dependent on the smooth flow of commodities through these systems.

In short, the neo-liberal freedoms of trade, investment and finance, will become the gravediggers of the system, if the working class becomes globally coordinated and if unions imagine and organise new forms of power to massively disrupt these systems until capital and its political allies come to the bargaining table.

The democratic union movement in the Global South has the capacity to imagine, plan and organise new forms of resistance to defend society and nature because they have been down that road at a national level as they engaged in national liberation struggles.

So what has SIGTUR done?

Shipping Boycotts

In its relatively short history, SIGTUR was the first union body in the world to experiment with disrupting the tight integration of the global economy that neo-liberalism had created when it successfully organised three shipping boycotts to defeat the neo-liberal agenda in Australia.

The first shipping boycott was planned as a global strategy in 1995, when the Western Australian state government prepared new anti-union labor laws, based on a system of individual contracts. SIGTUR communicated the predicament of Australian workers and boycott plans were developed. The COSATU NEC stated that they could not stand idly by while Australian workers were being attacked. The solidarity actions of Australian workers (shipping bans) were still fresh in the memory of the NEC members.

As a result of this action, these laws were withdrawn. The same tactic was utilised in April 1998, when the Conservative government in Australia developed an illegal scheme to de-unionise the Australian docks. COSATU in league with the International Transport Federation (ITF) again triggered a shipping boycott.

Global Campaigning

When the Australian Construction and Mining union (CFMEU) organized a global campaign against the UK headquartered Rio Tinto mining corporation SIGTUR played a key role in the Global South, organizing street protests across a wide range of countries. SIGTUR also participated in share-holder meeting interventions.

SIGTUR also organised various global protest actions at Embassies with regard to imprisonments in Korea, the Philippines and Thailand.

Photo by Rob Lambert

Global Responses to National Level Collective Bargaining

When an Australian construction company, Boral Australia, refused to bargain with the democratic union in the Indonesian branch of the company, P T Jaya Ready Mix, SIGTUR organised a global campaign of support in which the Australian Manufacturing Workers Union (AMWU), played a key role. The company caved in and Boral ordered its Indonesian branch to recognize the union.

Indonesian activists commented,

‘We understand that all victories seem small victories, however the victories evoke a spirit of resistance where workers unite and fight for all.’

A second illustration of this mode of action that SIGTUR has promoted and developed is the Hyundai struggle in Chennai India. CITU, the leading Indian federation, led a campaign for union rights in the Hyundai plant. These rights were refused. Management had a shocking attitude to Hindu culture, smashing icons at work stations. There were strikes and Gandhi styled passive resistance in the community. The KCTU from Korea participated in these protests as a mark of solidarity with the Indian workforce. They joined a human chain around the factory.

In turn, Indian workers visited Seoul to express their solidarity with the struggles of workers against casualisation in Korea. Both workforces have attempted to synchronise their collective bargaining strategies and the Maritime Union of Australia has joined these struggles.

Companies try to set one workforce against another within the same corporation. SIGTUR is in solidarity with these local struggles stimulating these global responses.

In Conclusion: Fighting for an alternative to neoliberalism

SIGTUR recently launched a Futures Commission, which has established a process of ongoing debate between labor committed intellectuals and SIGTUR leaders which attempts to specify an alternative model to neoliberalism grounded in short term, realizable goals as a basis for the long journey to a deeper transformation (see also SIGTUR’s Futures Commission and the search for alternatives in and beyond capitalism!). This recognizes that the struggle against the market model also needs to be driven by a vision of a new kind of economy, society and politics.

Countercurrents and Global Research 6/7/2013 and The 4th Media and The Market Oracle 7/7/2013In 2012, Professsor Seralini of theUniversityofCaeninFranceled a team that carried out research into the health impacts on rats fed GMOs (genetically modified organisms) (1). The two-year long study concluded that rats fed GMOs experienced serious health problems compared to those fed non GM food. Now comes a new major peer-reviewed study that has appeared in another respected journal. This study throws into question the claim often forwarded by the biotech sector thatGMO technology increases production and is beneficial to agriculture.

Researchers at theUniversityofCanterburyin New Zealandhave found that the GM strategy used in North American staple crop production is limiting yields and increasing pesticide use compared to non-GM farming inWestern Europe. Led by Professor Jack Heinemann, the study’s findings have been published in the June edition of the International Journal of Agricultural Sustainability (2). The research analysed data on agricultural productivity inNorth AmericaandWestern Europeover the last 50 years.

Heinemann states his team found that the combination of non-GM seed and management practices used byWestern Europeis increasing corn yields faster than the use of the GM-led package chosen by theUS. The research showed rapeseed (canola) yields increasing faster inEuropewithout GM than in the GM-led package chosen byCanada. What is more, the study finds that it is decreasing chemical herbicide and achieving even larger declines in insecticide use without sacrificing yield gains, while chemical herbicide use in theUShas increased with GM seed.

According to Heinemann,Europehas learned to grow more food per hectare and use fewer chemicals in the process. On the other hand, theUSchoices in biotechnology are causing it to fall behindEuropein productivity and sustainability.

The Heinemann team’s report notes that incentives inNorth Americaare leading to a reliance on GM seeds and management practices that are inferior to those being adopted under the incentive systems inEurope. This is also affecting non GM crops.USyield in non-GM wheat is falling further behindEurope, “demonstrating that American choices in biotechnology penalise both GM and non-GM crop types relative toEurope,” according to Professor Heinemann.

He goes on to state that the decrease in annual variation in yield suggests that Europe has a superior combination of seed and crop management technology and is better suited to withstand weather variations. This is important because annual variations cause price speculations that can drive hundreds of millions of people into food poverty.

The report also highlights some grave concerns about the impact of modern agriculture per se in terms of the general move towards depleted genetic diversity and the consequently potential catastrophic risk to staple food crops. Of the nearly 10,000 wheat varieties in use inChinain 1949, only 1,000 remained in the 1970s. In theUS, 95 percent of the cabbage, 91 percent of the field maize, 94 percent of the pea and 81 percent of the tomato varieties cultivated in the last century have been lost. GMOs and the control of seeds through patents have restricted farmer choice and prevented seed saving. This has exacerbated this problem.

Heinemann concludes that we need a diversity of practices for growing and making food that GM does not support. We also need systems that are useful, not just profit-making biotechnologies, and which provide a resilient supply to feed the world well.

Despite the evidence, governments capitulate

Given the mounting evidence that questions the efficacy and safety of GMOs (3,4,5,6,7), it raises the issue why certain governments are siding with the biotech sector to allow GMOs to be made available on commercial markets. It is simply not the case that country after country is accepting GMOs on the basis of scientific evidence, as scientists-cum-lobbyists for the GM sector often state (8). If scientific evidence were to be determining factor, few if any countries would have sanctioned GMOs.

Part of the answer lies in the fact that the powerfulUSbiotech sector continues to forward its agenda that GMOs are a frontier technology that will save humanity from famine and hunger. This is despite evidence that most of the world’s hunger is the product of profiteering industrial chemical agriculture and the global structuring of food production and distribution under the banner of ‘free trade’ and ‘structural adjustment’ (9,10), or as many of us know it brow beating and structural dependency.

Yet, the mantra of GM as the saviour of humanity persists courtesy of the GM sector’s puppet politicians and regulatory bodies (11). The US is pushing for lop-sided bilateral trade agreements with other countries not only to generally tie economies into US economic hegemony in an attempt to boost its ailing economy and flagging currency, but more specifically to get nations to ‘accept’ GMOs. Through behind-closed-door deals (12,13) coercion (14) or the hijack of regulatory bodies (15), there has been some success, and many think it could be just a matter of time before other countries, not least India, capitulate to allow GM food crops onto the commercial market.

In fact, regardless of any legal statute, it may be and probably is already happening inIndia, not least via contamination (16). However,if contamination by means of illegal planting and open field ‘testing’ fails to get GMOs on to the commercial market via the back door, the GM sector is attempting to cover all angles. Immediately after a moratorium on BT Brinjal was announced in 2010, a Biotechnology Regulatory Authority of India (BRAI) Bill suddenly emerged. The BRAI Bill could not be passed in 2010 and 2011 because of objections, but it has surfaced again as a 2013 Bill. Environmentalist Vandana Shiva argues that it not so much constitutes a Biotechnology RegulationAct, but a Biotechnology DeregulationAct, designed to dismantle the existing bio-safety regulation and give the green-light to the GM sector to press ahead with its agenda in the country.

By highlighting the GM sector interests behind the proposed legislation, Shiva says that the goal is to give the sector's corporations immunity by freeing them of courts and democratic control under India’s federal structure. For those who follow such developments inIndia, it doesn’t take a great deal of imagination to appreciate that the future of Indian agriculture is in the wrong hands. Certain key scientists and top politicians have already been ideologically (or otherwise) ‘bought and paid for’ by proponents of the ‘Green Revolution’ and more recently the GM sector (7).

On a global level, with reports of wheat (17), rice (18) and maize (19) having been widely contaminated with GMOs, there seems to be a conscious ploy to contaminate so much of the world’s crops so that eventually GMOs take over regardless and render the pro/anti GM debate almost academic (20).

It seems that secretive trade deals, the hijack of official bodies designed to ensure the ‘public interest’ and bullying or intimidation are not enough. Contamination strategies are but one more way of achieving through closed and non-transparent methods what could not be possible by transparent and democratic means - simply because hundreds of millions of people do not want GMOs.

A generation down the line (or much sooner), will we looking at the health and environmental consequences of GMOs in the same way we now regard the impacts of the original ‘Green Revolution’?

“There are very good reasons why we have never introduced a Green Revolution into Africa, namely because there is broad consensus that the Green Revolution in India has been a failure, with Indian farmers in debt, bound to paying high costs for seed and pesticides, committing suicide at much higher rates, and resulting in a depleted water table and a poisoned environment, and by extension, higher rates of cancer.” Paula Crossfield, food policy writer/activist (21).

We don’t have to take Paula Crossfield’s word for it, though. Punjab was the ‘Green Revolution’s’ original poster boy, but is fast becoming transformed from a food bowl to a cancer epicenter and now reels under an agrarian crisis marked by discontent, debt, water shortages, contaminated water, diseased soils and pest infested cops (22,23,24).

In the meantime, big ‘ag’ in collusion with big pharma will continue to control our food and define our healthcare by pushing their highly profitable ‘miracle solutions’ for the health and environmental problems which they conspired to create in the first place. It is all part of the wider corporate-elite agenda to colonise and control every facet of human existence.

The World Bank reports the global economy will expand less than the expected 2.2 percent this year entering a period of a â€œnew normal" of slower growth rates in emerging countries and moderating commodity prices.

Similar to other public sector areas in the UK, Higher Education (HE) is currently under attack. The introduction of tuition fees of up to £9000 per year, the downward pressure on wages and the attack on pensions imply a fundamental transformation of the sector. In The Great University Gamble: Money, Markets and the Future of Higher Education(Pluto Press, 2013), Andrew McGettigan unravels the true objectives underlying restructuring in English HE. In this post, I review this fascinating book and provide some additional reflections on aspects of resisting restructuring.

Unravelling the restructuring of higher education

The cuts of direct government funding for universities was part of the 2010 Comprehensive Spending Review. Having assumed office with the promise to get national debt under control, cuts across the public sector including Higher Education (HE) were justified by the new coalition government through reference to the fallout of the global economic crisis. In The Great University Gamble, Andrew McGettigan unravels the true objectives underlying this policy. The crisis provided a convenient justification for cuts, he concludes, but it was the opening up of HE to private competition, which was the real purpose of restructuring: ‘new private providers are encouraged to enter the sector, established charitable institutions must become more commercial and more corporate in their governance, new opportunities are created for private equity’ (P.185).

Student loans: smoke and mirrors

In exchange for losing government funding, universities have been allowed since September 2012 to charge students annual fees of up to £9000. It is the risky way in which the related student loans have been organised, which clarifies that financial savings cannot have been the prime motivator of government policy. In the new system, instead of providing direct grants to universities for teaching, the government advances cash to the Student Loans Company, which in turn provides loans to students so that they can cover their tuition fees. Any saving realised through the new regime results from an accounting trick. ‘Grants paid to institutions are expenditure. A £3 billion cut to grants is a £3 billion cut to expenditure. Loans work differently. The money loaned is expected to come back – therefore it is not straight-forwardly expenditure. Initially, only the estimated loss on loans counts as expenditure’ (P.159). Currently, the government operates on the assumption that it will lose 32 per cent of what has been loaned, which if calculated as expenditure, will still imply a reduction of annual spending on education. This accounting practice, however, bears great risks. Student loans have a long re-payment cycle. For years, governments will have to advance billions of pounds of fees without knowing exactly how much will be paid back. ‘Outstanding student debt, money owed to the government, will climb from £35 billion in 2012 to £191 billion by 2046’ (P.165). And while the government calculates with a loss of 32 per cent, other assessments predict 37 per cent, which would result in an additional £680 million per year of costs. In general, ‘these loans are unsecured, there is no asset connected to them that can be cashed in, such as, say, a mortgage backed by property. We have to assume that there are no profound political or economic changes’ (P.48). Why would the government embark on this financial gamble at a time, when it has been proven that gambles of this kind can go horribly wrong?

Privatisation, competition and commodification

The government’s real ambition, McGettigan convincingly argues, is the partial privatisation of HE in order to introduce market competition in the sector and to provide new outlets for private investment. It is the same rationale, which also underlies NHS reforms and the restructuring of primary and secondary education. Public services and their democratic accountability are eroded in favour of the market and private companies. It is the shift to fees, which gives new providers and private equity access to the student loan book, thereby ‘creating new outlets for value extraction’ (P.78). And with private providers entering the market, ‘the majority of universities will need to become more akin to commercial operations, charging for services’ (P.5). In short, the nature of the whole sector is transformed. Private companies such as Pearson/Edexcel have not yet been given Degree Awarding Powers. Nevertheless, throughout the volume McGettigan provides a number of examples of joint ventures in which private companies become directly involved in the organisation of HE in order to make profit.

Commodification is part and parcel of private sector participation in HE. ‘The higher fee encourages the applicant to consider undergraduate study as a form of “human capital” investment, or the purchase of a financial asset, the returns on which are to be seen after graduation in the form of higher earnings’ (P.25). Unsurprisingly, this focus on high paid employment and employability comes at a cost. Subjects not directly related to employment, as for example Philosophy or History of Arts, are likely to lose out. ‘Becoming responsive to demand may see universities shedding subjects which could lead to lost capacity and a contraction in the breadth of what is on offer’ (P.63). Wider public goods such as the formation of critical citizens will be lost as a result of this sole focus on employment.

Resistance and mobilisation

In sum, this book provides an excellent and highly important overview of current restructuring of HE in England and its underlying purpose of privatisation. And yet, for those of us interested in resisting restructuring, it can only be a starting-point. The future of HE in England does not only depend on who has the ‘better’, ‘objective’ arguments about what a ‘good’ HE system should look like. Restructuring is first and foremost also an issue of balance of power between different interests in wider society. As McGettigan makes clear, it is the interests of private equity to find new investment opportunities, which are behind the government’s agenda (P.8). In order to resist these interests, counter power needs to be built up through broader mobilisation within HE and society more widely. In the reminder of this review, I will reflect on several additional aspects relevant to resistance.

First, current restructuring of HE does not only consist of an increase in tuition fees and private sector participation, which is mainly the focus of McGettigan’s book. It is also reflected in the attacks on pensions as well as staff’s general terms and conditions. Moreover, the sector is increasingly characterised by performance related pay schemes intended to ensure the close monitoring of employees. An ongoing process of de-professionalisation is reflected in the transformation of academics from autonomous, independent and collegial professionals into a standardised workforce, operating within an ever tighter net of regulations. Considering that these cuts in pay and working conditions are imposed at a time when ‘the sector overall in England is at its healthiest for many years’ (P.113), it is clear that employers have fully bought into the government agenda. Universities themselves have increasingly contributed to the marketisation of HE especially through the way they have tried to establish themselves as key players in an increasingly global market of HE, be it through campuses in other countries, be it through joint ventures with institutions elsewhere around the world. Resistance to restructuring needs to confront employers head on and forget past notions of supposedly joint interests between university employers and staff.

Second, when reflecting about resistance, we need to acknowledge that restructuring offers powerful incentives to individual academics, who perceive university administration as an attractive alternative career route to the traditional focus on excellence in teaching and research. The dramatic increases in Vice Chancellors’ (VCs) pay are regularly reported in the news. Underneath VCs, however, we can observe the rise of a powerful, well paid and expanding group of academics turned administrators, who personally benefit from restructuring through increased salaries and status. Resistance to restructuring needs to take into account the complicity of some colleagues in these developments and find an appropriate response.

What sort of trade union?

Finally, reflecting on resistance to restructuring also requires reflecting on the appropriate type of trade union organisation for this purpose. The University and College Union (UCU), which organises employees across Further and Higher Education in the UK, is at a crossroads. Should it pour further resources in the representation of individual members and transform itself into a kind of service union or should it develop more strongly an image of a campaigning union with the goal of impacting on the shape of HE as a whole? Clearly, it is only the latter strategy which may be able to resist restructuring successfully, while the former can at best ameliorate the situation for individuals without challenging restructuring itself.

These additional reflections should not, however, distract from the achievements of this fascinating book. McGettigan succeeds at providing an in-depth overview of key aspects of current restructuring and successfully uncovers the political and economic rationale driving these processes. It is a must-read for all those interested in understanding current change in HE in order to resist it.

[This post was first published in Another education is possible, No.4 (Spring/Summer 2013), pp.5-6.]